Whether you’re looking to take out a mortgage, lease a vehicle or qualify for a new credit card, you should know how your “fair” credit score will affect you.
Learn more about what your credit score means, including tips and tricks on how you can improve your ranking. We’ll also give you the chance to compare credit cards for fair credit, with recommendations for how to choose the best card for your needs.
American Express Cobalt™ Card
American Express Cobalt™ Card
Purchase interest rate
Eligibility criteria, terms and conditions, fees and charges apply
American Express Cobalt™ Card
Apply today and earn up to 5 points for every dollar you spend
Purchase interest rate: 19.99%
Cash advance rate: 22.99%
Annual fee: $120
Credit rating: Fair, Good, Excellent
Minimum age: Age of majority in province/territory of residence
Credit scores in Canada range from 300 to 900 points, but most credit bureaus say that a good score starts at around 650. A fair credit score sits just below the “good” credit range, starting at around 575 and going up to 650.
In simple terms, a fair credit score means that you pose a medium level of risk to banks and other lenders when it comes to defaulting on your loan. The lower your score is, the more risk lenders perceive and the less money you’ll be able to qualify for. That’s why it’s important to maintain your score and take measures to improve your ranking where possible.
Compare credit cards for fair credit
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What can I do with fair credit?
With a fair credit score, you’ll likely be able to qualify for a good selection of loans and credit cards, but you may get less favorable terms. What does this mean? You could pay higher levels of interest on outstanding balances or need a cosigner to qualify for bigger loans or credit limits.
Credit cards. You’ll likely be able to qualify for basic or low-interest cards, but you might have more trouble getting a premium card with exclusive perks.
Loans. You should be able to qualify for a personal loan or a car loan, but you may be charged higher interest rates.
Mortgage. It’s less likely that you’ll be approved for a mortgage with a fair credit score, but that’s not to say it’s impossible. You’ll have better luck if you’re closer to a 650 score or can find a cosigner for the loan.
How to choose the best credit card for fair credit
Compare your options. Aim to compare at least three to four cards to see which one will give you a high return on rewards and benefits for the lowest fee.
Search for a fee-free card. Find a card that doesn’t charge an annual fee so that you can put the money you save onto your balance.
Opt for low-interest. Look for a card that builds up less interest to keep your payments manageable.
Ask about intro offers. Lock in a card that offers 0% or low interest financing in the first few months of your contract so that you can stay on top of payments.
Decent rewards. Tap into a card that offers a good return on cashback, and use that balance to help make your payments on time every month.
Other benefits. Look for a card that offers basic benefits like fraud protection and extended warranty coverage.
How to improve a fair credit score
Make payments on time. This is the best way to improve your credit score, since your payment history accounts for roughly 35% of your total score.
Pay your balance off each month. Pay your balance off in full each month to improve your score and save money on interest.
Only apply for credit you need. Every credit check on your account will drag down your score, so only apply if you need the credit and you’re sure you’ll qualify.
Don’t cancel old credit cards. Keep old cards open even if you don’t use them to maintain your total credit amount and the length of your credit history.
Correct errors in your credit report. Contact the credit bureau if you notice any errors on your report and ask them to fix it.
A fair credit score will still let you qualify for competitive loans and credit cards, but you might get less favourable terms. However, you can use your existing credit to try to improve your score, so that you can get the most out of financial products on offer.
Frequently asked questions
You can apply for your credit score for free through TransUnion or Equifax (two Canadian credit bureaus) by visiting their website and filling out an online form.
Most credit agencies agree that a score of around 650 is considered good enough to be able to qualify for most forms of credit. That being said, if your score is a bit lower, you should still be close enough to this range to be eligible with less favourable terms.
The most important way to rebuild your credit is to make all of your payments on time. Even if this just means making the minimum payment every month, it’s much better than defaulting on your loan.
Claire Horwood graduated with a Bachelor of Arts from the University of Victoria, and became a freelance writer in 2017. She has traveled extensively (24 countries and counting) and enjoys working remotely for clients all over the world. In her spare time, Claire loves rock climbing, drinking inordinate amounts of coffee and reading the epic graphic novel series, SAGA.
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