Read on to learn about credit scores, how to find out your credit score before applying for a credit card, and several ways you can improve or rebuild it.
What's in this guide?
- Credit score requirements
- What credit cards are available for my credit score?
- Other factors that affect your credit card application
- Compare minimum credit scores for credit cards
- What types of cards can I get if I have poor or fair credit?
- Compare secured credit cards
- How to improve your credit score
- Repair your credit score
- How can I get my credit score?
- Get your credit score
- Bottom line
- Frequently asked questions
Credit score requirements
Credit scores in Canada range from 300 to 900 points, but most credit bureaus say a decent score starts at around 650. Anything above this number should qualify you for a standard loan or credit card, while anything below might cause you headaches when it comes to taking advantage of credit.
Where you sit on the scale will determine your general ability to qualify for lending or credit requests. When applying for a credit card, you can expect the following based on your credit rating:
- Excellent. You should have very few problems getting a credit card, loan or mortgage.
- Very good. Your score is good enough to be approved for most credit cards.
- Good. You could still apply for most cards but may not be eligible for the lowest interest rates.
- Fair. You may need to build up your score before you can get some forms of credit.
- Poor. Your credit needs work, but you can potentially qualify for credit builder programs.
What credit cards are available for my credit score?
No matter what your credit score is, there is a credit card option for you. These are some credit cards you could be eligible for depending on your credit score:
Card for excellent credit scores
This card offers a wide range of benefits including travel perks, an attractive signup bonus and the chance to earn a modest amount of cash back on eligible everyday purchases. Get up to 10% cash back in your first 3 months and the $120 annual fee waived in the first year.
After the promotional period ends, continue to enjoy rewards at the regular rate. Earn 1.5% cash back on all eligible purchases. Plus, cardholders can enjoy discounted tickets to highly popular performances. Get 15% off admission to Cirque du Soleil shows touring Canada, and 20% off resident shows in Las Vegas.
Card for very good credit scores
Card for good credit scores
The BMO Preferred Rate Mastercard is a simple, no-frills credit card with a low interest rate of 12.99% for purchases and 12.99% for cash advances. You won’t earn any rewards points or cash back, but this card’s low rate can help you save money and pay down your balance faster.Get a rate of 3.99% on balance transfers for 9 months with a 1% transfer fee. Plus, get the $20 annual fee waived in the first year. Plus, cardholders will get free Purchase Protection, Extended Warranty coverage and Zero Liability protection.
Card for fair credit scores
The American Express Cobalt Card boasts a wide suite of benefits and a powerful rewards program that lets you redeem points for travel, merchandise, Amazon.ca purchases, gift cards and statement credit. Earn 5 Membership Rewards points per $1 spent at eligible grocery stores, restaurants, bars, cafés and food delivery services. Earn 2 Membership Rewards points per $1 spent at eligible gas stations, and on transit and travel purchases. Earn 1 Membership Rewards point per $1 spent elsewhere. Terms apply.
Enjoy complimentary travel insurance, car rental benefits, protection on your purchases and a generous signup bonus. Earn up to 30,000 Membership Rewards points in your first year.
Card for poor credit scores
Build up your credit score and control your monthly spending with the Refresh Secured Card. With a monthly fee of $3 and an annual fee of $12.95, you can focus on rebuilding your credit score while getting access to a monthly credit limit between $200 - $10,000.
Other factors that affect your credit card application
Credit card issuers weigh a range of other factors before approving or denying your request for credit, including:
- Credit history.
Issuers like to see that you have a history of good credit. This includes making debt repayments on time and in full, avoiding carrying a balance for too long and using varying forms of credit responsibly.
This is the balance that you’re currently using on one single credit card compared to that card’s credit limit. A general rule of thumb is to keep your credit card debt to 30% or less of your spending limit.
- Employment status.
While credit card issuers typically prefer people to have full-time employment, you could still be eligible for some cards if you work part-time, are self-employed or if you have a pension or other source of steady income.
- Income vs expenses.
When you apply for a credit card, you will have to provide information about your current income, spending habits and any existing debts to help issuers determine whether you can manage more credit.
Compare minimum credit scores for credit cards
In the table below you can compare minimum credit scores needed for credit cards available through Finder.
What types of cards can I get if I have poor or fair credit?
If you’re sitting below 650 on this scale, there are many things you can do to help build up your credit rating and some forms of credit that you’ll still be eligible for in the meantime.
- Secured credit cards. For this type of card, you’ll need to put down a deposit. This becomes your credit limit and is used to secure the balance on your account. If you default on your payments, the bank can use your deposit to pay off your outstanding balance. Otherwise, you’ll get it back when you close down your account. Compare secured credit cards below.
- Low-interest credit cards. These cards let you save money on interest rates. This can come in handy if you’re struggling to pay off your principal balance because most of your payments are going towards interest.
- Prepaid credit cards. If you want to spend only what you put down on your card, you can try a prepaid card. The only issue with these cards is your payments aren’t reported to the credit bureaus, so they won’t help you to rebuild your credit. The upside is just about anyone can qualify, so you’ll still be able to access the benefits of having a credit card, like being able to make purchases online.
- Credit builder cards. These cards are designed for those who want to rebuild their credit. They typically offer lower interest rates and report all of your on-time payments to the credit bureau. Every time they report a payment, you get another notch added to your credit score.
- Store credit cards. Some store cards have more-relaxed requirements and may not even check your credit score. Even though these cards may seem like a good option, it’s important to note they often come with higher interest rates and fees, and some come with strict repayment guidelines in order to avoid even higher interest rates.
Compare secured credit cards
How to improve your credit score
- Use credit often. It might seem counterintuitive, but the more you use your card the faster you can build up your score, so long as you keep up with payments.
- Make payments on time. Your payment history accounts for roughly 35% of your credit score so it’s important to be consistent.
- Pay your balance off each month. Pay off your balance in full every month to improve your score and save money on interest.
- Mix up your credit types. Make on-time payments on a variety of debts, including credit cards, mortgages, loans and leases.
- Avoid applying for too much credit. Make sure you only apply for credit you absolutely need, since every credit check on your account will drag down your score.
- Keep a low balance on multiple cards. Avoid consolidating your debts onto one card because it can max out your limit and damage your score.
- Don’t cancel old credit cards. Instead of cancelling a card you no longer want, you should freeze your account but keep it open. This maintains your total credit amount and the length of your credit history.
- Correct errors in your credit report. Contact the credit bureau if you notice an error on your report and ask it to fix it.
Repair your credit score
How can I get my credit score?
Checking your credit score is the first step to improving your credit, since it will give you an idea of where you stand. It’s also important to find out what your credit score is to avoid rejected applications which can lower your score. The process for applying for your credit score can be done online or through the mail and you shouldn’t have to pay a fee.
- Choose which credit bureau you want to use. Canadian credit scores are calculated by two major credit bureaus: Equifax and TransUnion. You can apply using their websites.
- Fill out a request to obtain your credit score. You’ll need to fill out some personal information, including your full name, address and previous addresses held in the last 3-5 years. Make sure to provide proof of your current address.
- Provide proof of identity. The credit bureau will need you to supply a photocopy of two pieces of government-issued ID, including driver’s licence, health card, birth certificate, passport or bank statement.
- Choose delivery method. The most common way to receive your credit score is by mail. You can also request to see your score online for a fee. If you live in Eastern Canada, you may be able to visit a credit bureau in person.
Get your credit score
Understanding your credit score can give you a leg up when it comes to improving your credit situation. It can also help ease the stress of applying for new credit when the time comes, since you’ll know whether or not you’ll be able to qualify. Learn more by reading our comprehensive guide to credit scores.
Frequently asked questions
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