A credit score is a numerical depiction of your creditworthiness. It is based on your credit history, including how you are managed debt, how much credit you have, and how often you make payments on time. In Canada, credit scores range from 300 to 900, with higher scores indicating better credit.
Credit Score Ranges in Canada
Credit Score |
Range |
Rating Loan Impact |
| ✅ 800 - 900 |
Excellent |
Receive the best loan terms and lowest interest rates. |
| ✅ 720 - 799 |
Very Good |
Considered low risk and will qualify for competitive rates. |
| ✅ 650 - 719 |
Good |
Qualify for most loans but may not receive the best rates. |
| ✅ 600 - 649 |
Fair |
Qualify for loans, but rates will likely be higher. |
| ✅ Below 600 |
Poor/Bad Credit |
Your options limited, but some lenders will offer loans with higher interest rates. |
How Is a Credit Score Calculated?
Your credit score is determined by several factors. Each factor plays a different role in how your score is calculated:
Payment History (35%): The most important factor is whether you’ve paid your bills on time. Missed or late payments can significantly lower your score.
Credit Utilization (30%): This measures how much of your available credit you’re using. Ideally, you should aim to use less than 30% of your total available credit.
Credit History Length (15%): The longer you’ve had credit accounts open, the better it is for your score. Lenders like to see a solid, long-term credit history.
Types of Credit (10%): Having a mix of credit types (e.g., credit cards, mortgages, personal loans) can improve your score as it shows you can manage different kinds of debt.
Recent Credit Inquiries (10%): When you apply for new credit, it creates a “hard inquiry” on your report, which can slightly lower your score. Multiple hard inquiries in a short time may signal to lenders that you’re financially stressed.
How Does My Credit Score Affect Loan Approvals?
High Credit Score (720 and above): You’ll have access to more lenders, better loan terms, and lower interest rates. Lenders see you as a low-risk borrower.
Fair Credit Score (600-719): You can still qualify for loans, but the terms might not be as favorable. Some lenders may offer higher interest rates to offset the perceived risk.
Low Credit Score (below 600): Your options might be limited to payday loans or higher-interest personal loans. Some lenders specialize in bad credit loans, but you’ll face higher fees and rates.
At Payday Rocket, we connect with lenders who offer loans to people with all types of credit scores, including those with bad credit or no credit history.
How to Check Your Credit Score in Canada
In Canada, you can check your credit score for free through the two major credit bureaus:
- Equifax Canada: www.equifax.ca
- TransUnion Canada: www.transunion.ca
You’re entitled to a free credit report every 12 months from both bureaus. Checking your own credit score does not affect it, so feel free to monitor your score regularly.
How to Improve Your Credit Score
Improving your credit score takes time, but here are some tips to help you boost your score:
Make Payments on Time: Pay your bills by the due date to avoid late fees and negative marks on your credit report.
Reduce Credit Card Balances: Aim to use less than 30% of your available credit. Paying off your credit card balances can significantly improve your score.
Don’t Apply for Multiple Loans at Once: Too many credit applications in a short time can lower your score. Only apply for credit when you really need it.
Keep Old Accounts Open: The length of your credit history matters, so keep your oldest accounts open even if you don’t use them often.
Monitor Your Credit Report: Review your credit report for errors or fraudulent activity that may be hurting your score.
Loan Options for Different Credit Scores
Regardless of your credit score, Payday Rocket can introduce you to lenders that match your financial situation.
Excellent or Good Credit: You’ll have access to both payday loans and personal loans with lower interest rates and favorable terms.
Fair Credit: You may still qualify for personal loans, but the rates could be slightly higher. Payday loans are also an option for shorter-term needs.
Poor or Bad Credit: While your options may be limited, Payday Rocket works with lenders who specialize in offering bad credit loans. Payday loans are typically easier to qualify for, but they often come with higher fees and interest rates.
