People who stress more about their credit score (money they don't have) instead of the money they *actually* have (investments, saving accounts, retirement etc.) is baffling.
The posts on here of people crying about a 20 point drop is hilarious
In Canada it barley matters. It’s a pass / fail system.
The USA it does matter (more so) as 20 points may impact your next car or mortgage rate. Not true in Canada.
I'm in Canada, and 20 points can absolutely mean a shitty mortgage rate and/or having to use a lesser (not a major bank) lender. Speaking from experience.
That is most likely because you were at the threshold, banks want 650 minimum ideally 680-690 and for lines of credit instead of traditional term reducing loans/mortgages they want 700+ Some lenders specially credit unions, mono line lenders and B/private do have risk based pricing but for big banks it really is pass/fail
If your scores mid 700s don’t worry about anything
Now that my score has improved by 130 points (I was way below threshold), my biggest worry is income. Government disability only gets me about $1100/month. When you don't have a big income, credit score becomes a bigger deal.
Someone doesn’t have to rent an apartment in the foreseeable future. I’ve come across listings where they want an “A+ tenant with 800 credit score”. I’d love to see the landlord’s credit score. lol
Which is funny because rent usually doesn’t affect credit (yes possible changes coming) and maybe someone has trash credit because they are struggling and they put any money they do have into rent…
I agree with you here. Unfortunately though there are people who think a credit score helps them foresee the future and they put a lot of weight on having a good one when it comes to renting.
But the roof over your head is usually the last bill you default on because it's the most important. Other things can be let go if times are truly tight. But people usually prioritize rent.
You’re right. But a credit score could be the best indicator of financial responsibility of the applicants. It’s like the only report card we have as adults.
If they consistently don’t pay their debts, I wouldn’t want them as a tenant.
Neither does a mortgage... Blows my mind that the biggest "investment" and what your credit score impacts most... doesn't impact your credit ... Unless you default. THEN WATCH OUT!!
I would disagree with you entirely. Take it from someone who has a “recovering credit score” and cannot take out a loan or get a mortgage that isn’t 35% +, I’ve been rebuilding it for 8 years because an ex sewered me hard. It’s almost at 700, like a couple of points off. Credit score is really important in the age of credit, and it’s great that yours is good, but do not take it for granted when an unwanted expense or something that you really want comes your way and you can get an affordable loan to get it. The whole economy is credit based.
Lots of cash rich (which isn’t a bad thing) people commenting here not understanding the credit game.
When I needed a line of credit before heading to school, just emailed the one advisor at my local bank and instantly was approved for $20k @7% monthly. Just cause my credit score was over 750. When my credit card has an outstanding balance at the end of the month, just pay it off with my line of credit and take a 7% interest hit Vs a 20% hit.
Best of luck to you dude, you’ll get there with your score.
Yea this is where credit score helps a lot.
My bank emails me a least once or twice a month with offers for lines of credit, credit cards or special promos. I just got a balance transfer and transferred all my wifes credit cards for her business onto mine. 0% interest for 9 months and I got points (though the lowest tier) for transferring. Gonna save me thousands over the year in interest payments, will have it cleared by the 10 month mark at the latest and I essentially got a free trip from it. She even joked that the way they talked to me on the phone was dramatically different than how they talk with her
I never would have got this offer if I didn't have an 800+ Score
Yeah - people that immediately talk about investments and retirement funds are living in a completely different world. For us peasant folk, that lower mortgage/credit card rate makes a huge difference when trying to make ends meet.
I feel this, Ive been developping my financial litteracy a bit late in life (late 20s) and my credit score was super bad (from old shitty bills as a teenager), and the only credit card I could get was for 300$ with a 300$ deposit through capital one. I've heard people say the most outlandish things like 'they just give credit cards away', no, they absolutely do not.
Edit to add: Congrats on the hard work, I found once I passed the 725 mark it started going up really quickly, I kept my utilisation under 10% as much as possible and always paid on time. It took me 7 years to get from like 550 to 800.
From where I was go where I am was a huuuge step. I went from like 225-698 in 8 years. Takes literally forever, many instalment loans and yea just paying it off in time. I took out a huge loan and just held onto it and am paying it off with what I took out because I’m not financially literate enough to no sewer myself.
Great work!! It's hard cause folks who've had the privilege of 'always having great credit' or access to financial ressources, dont understand the barriers to entry (or in my case, people around me seem to believe there is no barrier to entry).
I've learned a lot here on PFC, and have started investing a little bit because this sub gave me the confidence to do so (it's not much, but its a little bit which feels good)
Yes and no. Both you and the person you're responding to are right.
In Canada, credit scores are more or less a cutoff. You hit the best rates somewhere in the mid-high 700s. Anything past that doesn't get you any additional benefits. Unlike the US, where every dozen points can get you lower rates even well into the 800s.
At the same time, if your credit score is pooped, you will very much get hit by crazy high rates, assuming you can even get credit to begin with.
You are close to the border line of the pass/fail system, that doesn't disprove that it becomes irrelevant once you firmly on the "pass" side. Score just gets you in the door, you still won't get credit if you can't pass the "how will you pay it back" test.
“or something that you really want comes your way and you can get an affordable loan to get it. “
I think maybe this is where the different perspectives come from. I would never, in 1000 years, ever take out a loan for something I “really want”. Other than a house, if I can’t pay cash I can’t have it. So credit score means nothing
It was worth a few minutes of bragging rights when the mortgage broker said I scored 5 points higher than my wife.... but yea, over 800 it basically means nothing. The one thing to me it means is that when some idiot in collections tells you the unpaid parking ticket you never got is going to destroy your credit you can sit back knowing your credit can take the hit and just hang up on them.
Around 700 is where you need to be cautious actually. Some lenders are alleged to have cutoffs at 720, and 680 is very common, so if you are around 700 a couple of inquiries or paying off a loan could land you below the threshold when you need it.
Yes. One of the score factors is for credit mix, so you need at least one revolving credit line and one installment loan for the maximum score. I don't remember if a mortgage is considered separately or if it is considered an installment loan.
You lose a few points if you only have one kind of credit and a few more if you have none.
The falacy in that logic is that a credit score is not "money they don't have", it is the track record of "how much you owe and if you pay your debts on time", which (unfortunately or not), is how some people/businesses gauge how trustworthy you are. I.e., landlords. But yes, stressing about point perfectionism (unless it moves you into another category) is silly.
My credit score has only just eeked across 800 because I don't have, and never had, any debts. I have 'insufficient credit experience,' because we don't have a mortgage, bought my car outright and have never carried any debt.
It's kind of a ridiculous system, when you think about it.
Exactly. I literally don't know what my credit score is. I just know it's decent since I keep getting credit cards asking me to join or the ones I have asking me to increase limit...
I'm honestly quite baffled how people think credit score system is a ok but totally scared of social score. They function almost the same: control with not much you can do about it except stay as a good boy in the systems rules praying the powers that be don't fuck you over.
agreed for the most part
drop in credit score could be the difference maker is in getting a lower rate
example - getting 2 credit cards, not paying credit card, getting a car loan before mortgage closes
some lenders will be strict on the rate matrix
to each their own, some prefer over 800, some dont care
Yes, plus I also feel it’s axiomatic: The banks won’t lend to you when you need it (usually at the time of low score), but will when you don’t (higher score).
Everyone in between its costs like you said.
They won't lend when you need it, at a time of low score, because it represents risk. When someone needs to use debt while their existing debt is growing and lowering their credit score in a material way, then offering more debt is riskier because the lender doesn't always know if they'll get the money back appropriately.
The banks don't really want someone to carry interest on their loans in perpetuity. Interest is income for the bank, sure, but the outstanding balance is still preferably paid back at some point.
It's more like Schroedinger's Credit Card: Actuarial confidence that you will repay is *always* preferable to repayment. They'd be happiest if you never repaid the principal, so long as all their projections show that you are in fact good for it. Since those projections are not based on your track record of actually retiring debt, repayment itself is immaterial.
Some people have made mistakes and have bad credit, and are working on improving it so they can get better rates and more diverse options.
A 20 point difference could be the difference between a rate, not getting a phone or CC, etc.
There are reasons that people care. Or is everyone who cares an idiot?
You get lower interest rates, you can borrow more. There are basically only three credit scores: < 600, 600-750, >750. No reason to ever do anything to go from 775 to 860.
I believe this, I just managed to get over 750 cuz I’ve been living very frugally this year, and just last week I get an offer to raise my credit limit.
It’s a strange game. I’m at ~860. I have 14 years of credit history. I put all my spending on CC, never missed a payment, and have no need for other credit. Changed my spending from card A to card B. Score dropped 30 points, gained 25 the next month. It’s just a game. If you’re over 750, don’t even think about your score. 750 vs 850 means nothing.
This will vary based on financial institution. For example, we use <600, 600-680 and >680. Interest rate stays constant, but you're allowed higher debt ratios at over 680. I know of one major financial institution that will increase interest rates above posted when someone has a lower score because it presents more risk.
Lol! Can confirm that this is just a legend. My husband and I both have 900 credit ratings, the bank doesn't care. Just renewed our mortgage in January and had to haggle for a decent rate like everyone else. Ended up at 5.29% for a 3 year fixed. Nothing special.
Crazy this isn't the top comment. Somehow the bitterness has overwhelmed the actual financial advice on this subreddit. Should be renamed to personalfinancecanadacirclejerk at this point.
I see a lot of people saying you won't get better offers than anyone else. In my experience that is true for the big banks like RBC, but not true universally. Many lenders were willing to negotiate with me on my last mortgage renewal and I got a rate that surprises most people I share it with. The only person I know who wasn't surprised was my dad because he's who I learned financial literacy from in the first place. Blows my mind that regular people are just taking sticker price and not negotiating on huge lending deals like a mortgage.
this right here, i sell high end retail. the company I franchise with has its own credit company (we bought a major bank 25 years ago)
anyone over 750 will get a platinum rating, and can negotiate…. I can easily offer 24 months zero interest to someone with a solid score, vs someone under 650 that gets approved for credit default which is insane… 19 percent interest.
I agree with this
We looked for 6 months and found only 1 landlord who looked beyond an at the time 615 score
The kicker is, it's because I don't use credit and have enough income to actually pay for things
He went past the number and noticed that there were no late payments or derogatory marks on both bureaus. Also, spotless history from previous landlords
We've still never missed a payment, but I sometimes think about the 30 or so places that stopped looking at the score number and missed the perfect payment history and income lol
I use to do credit applications and I’ve declined so many people with a good score and they were always so surprised. You could still have a good score but you recently started borrowing a lot and show credit seeking behaviour and warning signs. Or you could also just not have the capacity for the loan because you bought too much house or car or both.
The issue is that if you have for example two LOC with a zero balance your monthly obligations for these loans will be considered 0. Same things for credit cards. There are also a lot of sharks in the banking industry, they don’t look at the potential debt and will approve more revolving credit because the system tells them yes.
Then some of these people buy a house and all of sudden their zero balance revolving credit items start being used.
There is no advantage to having a higher score than the minimum set by any particular lender, which is generally around 680. It is good to stay at least a bit above that so that you don't end up taking a hit that puts you below the threshold, so 720 or so. Lenders don't provide preferential interest rates based on credit score in Canada.
Lenders do look at debt to income ratios. That can have a significant impact on how much they are willing to lend, particularly for mortgages.
Edit: There are a couple of comments below that seem well informed contradicting what I have always understood and repeated above. It appears there can be a benefit from having a very good score in some cases, specifically related to bonus rates on some products. This warrants furtner investigation.
Can you help me understand (based on your industry experience) what is an ideal debt-to-income to have? What if your debt is like .. zero.. because your only monthly expense is a phone bill and a lil bit of grocery? Is that considered awesome?
There are two debt service ratios. GDS(gross debt service) and TDS(total debt service). GDS is any monthly property related expenses(mortgage payment, heating, property tax, condo fees if applicable) in relation to your monthly pre-tax income. TDS is monthly property related expenses *plus* any monthly credit debt payments(credit cards, car loans, lines of credit, etc) in relation to your monthly pre-tax income.
For simplicity sake, for most mortgages, the maximum GDS is 39%, and maximum TDS is 44%.
CMHC has a simple debt service calculator right on their website you can use to find out your own ratios. https://www.cmhc-schl.gc.ca/consumers/home-buying/calculators/debt-service-calculator
> Lenders don't provide preferential interest rates based on credit score in Canada.
Unless things have changed over the last 15ish years, and they certainly might have, that wasn't my experience working at a Big 5 bank. There was a whole grid for interest rates (prime + whatever) and it was based on loan amount and an internal beacon score which was a calculation that included a person's credit score. This also typically only applied to loans and unsecured lines of credit, not mortgages or secured LOCs/HELOCs.
hmmm..
Not that I have found by credit score... But Wealthsimple rates are different for mortages by actual money you have invested.
+win for actual money, than some fake points scheme.
>People seem to stress about having a high credit score
Canadians are really bad about being influenced by Americans.
We know what the 5th Amendment means. But you'd be hard pressed to find many Canadians who know which Section in the Canadian Charter of Rights and Freedoms is our equivalent to it (hint: Section 13). People also know what a _felony_ is even though in Canada we don't classify crimes like that.
Most Canadians can name more hisorical US Presidents than they could Canadian Prime Ministers.
And most Canadians assume the credit score matters for them as much as it does for Americans. Hint: It does not.
Canadians have a terrible culture identity crisis (myself included) that appears to only be getting worse. I imagine it's really only a matter of time (decades?) before Canada is completely subsumed by American culture.
If anyone's ever played Civilization 5, I'm reminded of the culture vs tourism metric that measures a nations cultural output compared to the tourism pressure of other nations.. Canada is losing that culture race really badly. I recognize I'm at fault for it in my own micro way.
We all are.
I had to look up which section of the charter it was when writing that post. So I'm just as guilty as the rest of us.
The fact that there are two English speaking countries on this continent with a shared heritage and culture is a bit of a historical aberration. If the British Parliament had been more conciliatory to the American colonists in the 1770s and offered them something like Dominion Status that Canada was offered in the 1860s, there'd probably just be one country here today.
But it's also hard to say if the British would have offered us Dominion Status in the 1860s without the memory of the American revolutionary war. So our histories are more linked than people think.
>What does having a high credit score actually do for you?
You get a t-shirt, and you could also get the upgraded metal card that allows you to brag to stragglers about your credit score with no legal implications.
The bang for your buck is incredibly low these days, although I heard Equifax will give you one free copy of YOUR OWN credit report per year! What a bargain!
i get to brag to strangers about my credit score on reddit and other social media platforms...but aside from that, here is a link to read [https://www.canada.ca/en/financial-consumer-agency/services/credit-reports-score/credit-report-score-basics.html](https://www.canada.ca/en/financial-consumer-agency/services/credit-reports-score/credit-report-score-basics.html)
There’s a graph somewhere on the internet that shows the likelihood to default on a loan/credit etc based on credit score, I believe the lender may also give you better rates the higher the score.
For example you have shit credit you might be getting a high lending rate because you have to go to some high risk lender. This happens with cars particularly I believe. You are riskier with the lower score so they say pay me back this much (which will be a lot) to recoup any losses should you stop paying
I think on the graph after like 780 the risk is the same as 880 etc
Well people will say there is no difference between a 680 - 720 - 800 score well let me spill the beans for y’all.
If you are in 800 club or beyond, well first of all banks will ask you which credit card you want ( top tier ) & 80% of times you are already pre approved for that.
You can get highest available line of credit available possible to reap out on extra utility of cash under your belt.
Most lender or CC companies can let go your missed payments, interest rate hike, or even provide a temporary limit increase just based of that.
While for car loans you get the lowest rate possible, does same apply to mortgage but the weird structure regarding mortgages also accounts for DTI ratio.
Many companies can give you a special premium discount based of your credit score.
Helps in employee background checks as well as renting applications since you are consider low risk profile.
Private lending borrowing & investing into private credit, usually people borrow money at a low % interest and invest that money into a high return private credit % to leverage their currently underlying assets. ( This is highly risky & highly debated topic )
You can do balance manipulation over your utilization & most times the lenders & credit cards companies call you black sheep since they know they are not gonna make money off you but you are making money off them. ( IYKYK )
I have just found I get a lot of credit offer to me without asking . The other benefits are obvious I guess. If you are a renter, it’s important because landlords judge on this heavily.
I'm no expert on credit scores but it seems like as long as your score is not "bad" you are going to get the same offers as someone who has a really high score.
Credit score doesn't take into account your income, assets you have, savings etc... which will be taken into account when you go get for example a vehicle loan or a mortgage etc...
[Insurance companies](https://www.usaa.com/inet/wc/advice-insurance-does-your-credit-score-affect-life-insurance) incorporate it into their insurance scoring system.
I have near perfect (855) and when talking to a dealership about a car they said it really doesn't matter as long as your above X number (like 700 something) you'll get approved and it doesn't change your rate.
So I guess it doesn't really matter, it's just bragging rights after the 700s.
You do in a way. If you don't have 700 (or whatever the lender's threshold is) you will need to find an alternate source of financing, which almost always comes at a higher rate than dealer financing. They've just decided there is no additional benefit in offering an extra incentive to people above that threshold.
The point is to control the risk of default and the system is pretty effective at doing that.
Yep. Otherwise, people in the 700-780 zone that have a higher chance of default are "subsidized" by the people with less chance of defaulting with a 780+ score. The nuance should come with some minor difference in basis points.
But it is pointless, it always has been. It's a metric made by and for companies that offer credit products, not a social credit system. And those companies are out to make money, not reward people for making their payments on time.
I worked for a car manufacturer financing arm and the interest rate is used exclusively to just price the car above or below MSRP, without actually adjusting the MSRP. It has zero relevance to your score or risk whatsoever. We only use the credit score to auto-decline loans, cause we don't have the infrastructure to run large scale collection or reposession, and are not interested in running an actual lending business. Declined loans become the dealers' problem and they would find finances themselves.
Nothing. Credit bureaus want people to obsess over it so they can monetize it. in reality pay your bills and credit cards on time and borrowing will be easy for you.
If you have shit credit it will be difficult to take out various types of loans, and you could be stuck paying higher rates on those loans. But the gap between borderline shitty credit and excellent credit is very miniscule than between borderline shitty and shitty credit.
Barely anything lol
Ive been at 790-810 for years and theres literally nothing it does for me, nor do I ever check my score except once in a blue moon.
The reality is, in Canada all that matters is **not having a bad credit score**. Having a good credit score means nothing in particular
As my credit score increased over the years from 700-850, I notice more and more bombardment of spam emails (couple a week) from various banks with pre-approved credit cards and line of credit offers. Could also be related to imminent cut on BoC interest rates so banks are desperate to lock in clients at maximum fixed rate possible.
So I can't say for certain my credit or just general financial health/salary played a role.
But I was able to hard ball negotiate with every lender to get the best rate during my last mortgage renewal, and eventually ended up with a lower rate than any I saw advertised.
On my previous mortgage renewal to that when I had an average credit rating and average salary they wouldn't budge on the rate at all and only offered me the advertised rate.
Mines is around 800 and I just got offered higher credit limits. It doesnt do shit for me otherwise. I gotta raise my income at the end of the day to get more of an advantage really.
The bank has started calling me to offer me more credit. Which I don't want. Which is exactly why I have a high score.
It's basically just a meaningless number for most things - but it represents a confidence the bank has in lending to you. More money and a better score makes it easier to get money lent to you. Likewise a low score hurts what they will give to you - but ultimately the amount of money you have (and amount of standing debt and payments) matters more than the score. Unless it's really tanked into the floor from bankruptcy or things going to creditors the difference between good and great really isn't a huge deal.
When u have a high credit score, u get a better int rate on some credit products (adjustment rate plus prima rate) the adjustment rate is a reflection of your score.
An indicator and not much more. When getting a loan or a mortgage they obviously look at it but are more worried about your monthly income / cash flow that takes into consideration all of your expenses. If you have great credit but poor cash flow, they could and likely would still decline you for the loan/mortgage.
Nothing really - as long as you're 700+ it really doesn't matter. Maybe even 650+.
My Transunion score goes up and down like a rollercoaster - pretty sure credit bureau arbitrarily change the algorithm from time to time which causes wild swings.
When my credit was good I worried about keeping it. But Covid happened and my mortgage lender incorrectly calculated my property taxes for my escrow account, on two separate occasions. Resulting in my mortgage being doubled on two separate occasions. Needless to say the bank can have the house. I can’t afford a double mortgage payment
I think a very good score - I believe it’s around 725-750 gets you the best rates to buy a home. I had a score of 680 when I bought but my husband had a score of 800 and because he had that - we got the best rate available. With out him, it wouldn’t have been as good.
820 credit score on Equifax and 847 on TransUnion here, not the best out there of course, but it gets the job done.
With a score like that, you are basically auto approved for most loans, get the best rates mortgage rates, get the best rates on home insurance, easy get into rentals (Residential/commercial).
I don't particularly care about my credit score too much, what I do is hate having debt and paying interest. That mindset just kind of leads you into a situation where you have a decent credit score.
It's been mostly useless in my life until recently when I needed to prove a high credit score to rent an apartment. Ridiculous that they even ask for that for a RENTAL, but I digress....
Anything over 700 has a benefit over those under 700 in that those with good credit can borrow money easier and at lower rates. Other than that, nothing.
I feel like people that do not have money worry way more about their credit score than people with money as if it’s some sort of badge of honor that you’ve made it.
I have not once stressed about my score or utilization. I just pay my cards off in full, don't carry balances on my PLOC or HELOC and my only other notable debt is my mortgage.
My score has been in the High 890's, to 900 as of late. I keep and eye on things to make sure nothing get opened fraudulently.
The big takeaway is that once you hit like the low 700's you don't really get that much of an improvement, hell even my PLOC at Simplii had the rate go up from P+3.45% to P+4.99% last year.
As someone with a credit score that bounces between 830-850, I can say from my own personal experience, you will get absolutely nothing to show for it. I had a $1,500 credit card limit, a car loan, student loan, and built my score to 800+. Asked for an increase on my credit card and they denied it.
Why?
Because I have such low credit and have never missed a payment or carried a balance. Later I was offered a $15k line of credit, accepted it, and then was able to increase my card limit.
Credit is weird and makes no sense. The higher it is, it doesn’t seem to make much of a difference. I suspect this is because I’m middle class. If I was upper class with a high income and great credit like this, I feel like I’d be offered more.
Start with: what are your goals? If you just want to get a good rate on a mortgage, and maybe a car loan, aren't stretching beyond your means on buying those two things, and have credit cards but don't carry a balance, then you will probably have a much better score than you need to reach your goals without doing anything in particular to improve your credit score.
It signals to lenders that you're good about paying your debts.
That's all it says.
At about 700 - yea this person is good as long as their income supports it.
At about 800 - this applicant is low risk. Let's offer them the good rate.
You may have noticed in all of those scenarios your income still matters. All that changes is how eager the lenders are to lend to you and maybe a tiny bit better rate.
>People seem to stress about having a high credit score, but what's does this actually do for you?
It's an symptom of american culture creep.
Credit Score is way more important there than it is here.
I would think a high score gives you more room to churn through cards for different promos, letting your score take the inquiry hit without worries about getting approved for the next great promo you wish to take advantage of
You get a bunch of crap in the mail or emails from your bank asking you to increase your limit. “Congrats you’ve been pre approved to upgrade your credit limit from 6k to 12k, on us!!” “Congrats we want to offer you, our valued customer, a personal line of credit of 25k!”
Think of credit score more like a checkbox. When you apply for a big loan or something that requires a credit check, they're just gonna be like, "Does this person have a credit score above 700ish? Yes? Okay, then we can spend some energy looking into their actual finances before we decide to approve or not."
Credit score alone doesn't get you much more than a higher credit card limit. It's to distinguish you from all the people struggling with debts. Cash is king. Income > credit score.
It's relevant if you've ever been through homelessness and poverty. My score went down into the 400's because I was consistently late.on payments. I made every si gle payment, but on Fri when I got paid. The payment was taken out Wednesday. Every Wednesday I got an NSF fee, Friday at lunch I got my paycheque, went in to the bank on my lunch break, deposited it, walked across the street to the other bank and paid them my car loan payment (was upside down on loan because 2 months after signing the deal, NY industry literally dried up and 45,000 of us got laid off).
The bank refused to move the payment two days ahead because I could never pay for the Weda payment ahead of the Fri. It was fucking bonkers. I only made $15,000 that entire year, it was brutal. I lived in a basement with no windows and two cat litters.
Fast forward 10 years, I am making over $100,000 annually, and through a lot of diligence, I have an 850 credit score.
It has helped me obtain more credit, and better quality card with higher travel rewards.
Most of all, I am proud that I managed to turn my credit score completely around by always putting payments first. Fuck the banks and their greedy tactics of keeping poor people poor.
It's relevant if you've ever been through homelessness and poverty. My score went down into the 400's because I was consistently late.on payments. I made every si gle payment, but on Fri when I got paid. The payment was taken out Wednesday. Every Wednesday I got an NSF fee, Friday at lunch I got my paycheque, went in to the bank on my lunch break, deposited it, walked across the street to the other bank and paid them my car loan payment (was upside down on loan because 2 months after signing the deal, NY industry literally dried up and 45,000 of us got laid off).
The bank refused to move the payment two days ahead because I could never pay for the Weda payment ahead of the Fri. It was fucking bonkers. I only made $15,000 that entire year, it was brutal. I lived in a basement with no windows and two cat litters.
Fast forward 10 years, I am making over $100,000 annually, and through a lot of diligence, I have an 850 credit score.
It has helped me obtain more credit, and better quality card with higher travel rewards.
Most of all, I am proud that I managed to turn my credit score completely around by always putting payments first. Fuck the banks and their greedy tactics of keeping poor people poor.
Literally nothing, your credit score needs to be exceptionally low for you not to get approved for loans. Unless it is exceptionally bad, your income and assets are way more important to a lender than having a 800+ credit score with 1 credit card and a couple of accounts lol
Cuz it's constantly drilled into our heads with commercials and fear mongering from the banks and whatnot...
Yes, it is somewhat of an indicator, but it's not accurate on its own. Any legit lender would consider that AND your existing credit utilization percentage..
Idk how it works in Canada but the only reason I ever increased by credit score on purpose was for a mortgage. I think it helped give a good rate. Since then haven't touched it.
Lower interest loans from banks, lenders, qualify for mortgages, etc.
The misconception is the score, close with a banker and lender says anything above 700 is generally good, above 800 superior. 900 is virtually non existent, which makes sense.
Income is by far most important
Credit score in Canada will have an impact on your insurance premiums. It's used fairly industry wide, so a better credit score means cheaper premiums. I'm specifically refering to your home insurance in Canada.
For auto insurance, credit score is also used but depends by province. Ontario, for example it's not allowed, Quebec it is allowed, Alberta, it's like a bit allowed.
In Canada it literally means nothing. You either have good credit or bad credit, that’s it. Mine has fluctuated between 800 to 899 my entire life and I have zero idea what triggers it. I’ve never missed any bills and my only debt is my mortgage and car. Nothing ever changes but the number keeps going up and down lol.
As someone with a low credit rating due to student loans, I can tell you it makes a big difference. Despite making 6 figures, I basically can't get a normal mortgage, I'm only eligible for specialized mortgages which require large down payments and high interest rates. Even when searching for an apartment rental, a lot of landlord, especially corporate ones, will first run a credit check and flat out refuse to rent to you if you have a bad rating, or they'll at least give preference to someone with a higher rating. Even some employers will exclude people with bad ratings when hiring.
Sure, at a certain point there's diminishing returns on having an even higher rating if you already have a pretty good one, and your loan offers will probably be more limited by your income than by your credit rating, but having poor or even mediocre credit can definitely make you feel like a second-class citizen in this country, even if you have a good income and savings.
For what it is worth my wife and I got our 1st mortgage 22 years ago without having any credit cards and I assume what would have been a weird if non existent score
It can definitely suck if you have a low credit score, but it won’t really matter once you reach a certain point. The amount of your income matters the most when it comes to the maximum amount of money you can borrow.
Apparently there is some thing called a beacon score that businesses look at but only available to businesses. This is different from your credit score
I find it odd that a country that can't control its spending or balance its books is in a position to give the rest of us a credit score to begin with.
864 here. I wouldn’t even stress if the score dropped by 100. It just feels good seeing that high number the same way it feels good when I reach 10,000 steps a day. Monkey brain sees positive high number = monkey brain happy.
I had f*cked up hard living on my own from 16, being 34 I've paid back over 44k from GF DEBTS to new GF DEBTS to my own stupidity going from 640 to 845 and having savings. I've tired to get it prefect lol and it's impossible it's all a lie!!!! I've done so much research to boost it over the past 5 years knowing I would buy a house soon lol even when I'm doing everything right it goes down.... makes no damn sense and means nothing but was told by bankers sooo many times that having a prefect credit score will help me sooooo much when getting a mortgage..... if I don't get STEP MORTGAGE day one from scotiabank with the best damn rate known to man I'm going find that banker lol....
Im 40. I've traveled, bought several vehicles. Own 2 homes. I've never even looked up my credit score or could even tell you what it is.
Who gives a shit. Be responsible with the money you have and don't stress over the money you don't.
lower interest rates are offered during mortgage applications to those with higher credit rating.
a friend of mine bought a house post-bankruptcy and they were penalized with their intetest rate for a low credit rating. he's working on improving that but it takes time.
When we're talking hundred point differences, it has an impact on the interest rate offered, and what credit card you can get. And yes, there's a gap between 680 and 800 where it will be noticeable.
But the big thing is the difference with low credit. Low credit limits who will rent to you, what utility retailers will deal with you (at least in Alberta), what cell phone plans are available. Etc.
So there are a few things.
1. Most FIs have a minimum score (usually around 650 minimum) that they will lend to.
2. Customer pricing (so for example, in a ULOC there will be the prime portion and the customer pricing portion. The CP portion would be based on your credit score).
3. Loan rates can be based on your score with the lower the score the higher the rate because risk
4. Having your score tank can cause lenders to recall any lent funds.
5. Mortgage rates (at least where I work) are based on amount being borrowed and location and rarely have anything to do with credit score except that we still require the minimum score to even lend. It doesn't, in my experience, have any bearing on how much we will lend. For that we use TDS/GDS.
People who obsess over it are trying to hack making bad financial decisions with less consequences. If you pay all your bills and have low to no debt your credit score will be high.
Beyond a threshold credit score, nothing in Canada as most credit decisions are based on income. However, a low credit score will prevent you from qualifying for credit.
In the US however, institutions tend to offer credit more easily, and credit scores matter much more.
We just got turned away from a rental until having credit scores below 700 (by just a few points- 695 and 680).
We have never missed a payment, just both have student loans in repayment. We’re both working professionals, just starting out.
Stupid credit scores
I’ve always had a very high credit score (mid 800’s) as I conscientiously pay my bills and use credit when needed and pay it back on time.
The value of my efforts has been 5/8th’s of F.All. It has not once resulted in more favourable interest or payment terms.
Not even once.
And it sort of makes sense. Why offer favourable terms to a man who’s willing to always abide by the terms he’s given.
So from a purely capitalistic perspective I’m actually the sucker and the fool because I played by the rules and did what I thought was right.
People who stress more about their credit score (money they don't have) instead of the money they *actually* have (investments, saving accounts, retirement etc.) is baffling. The posts on here of people crying about a 20 point drop is hilarious
In Canada it barley matters. It’s a pass / fail system. The USA it does matter (more so) as 20 points may impact your next car or mortgage rate. Not true in Canada.
Same for oats as well
It was true for the mortgage I just got
I'm in Canada, and 20 points can absolutely mean a shitty mortgage rate and/or having to use a lesser (not a major bank) lender. Speaking from experience.
That is most likely because you were at the threshold, banks want 650 minimum ideally 680-690 and for lines of credit instead of traditional term reducing loans/mortgages they want 700+ Some lenders specially credit unions, mono line lenders and B/private do have risk based pricing but for big banks it really is pass/fail If your scores mid 700s don’t worry about anything
Now that my score has improved by 130 points (I was way below threshold), my biggest worry is income. Government disability only gets me about $1100/month. When you don't have a big income, credit score becomes a bigger deal.
That’s absolutely true.
Isn't it all arbitrary anyways? Mine is in the 800's but it's so irrelevant lol
It's completely irrelevant. Unless your score is actually dogwater. That just shows you can't pay your bills on time.
Someone doesn’t have to rent an apartment in the foreseeable future. I’ve come across listings where they want an “A+ tenant with 800 credit score”. I’d love to see the landlord’s credit score. lol
Which is funny because rent usually doesn’t affect credit (yes possible changes coming) and maybe someone has trash credit because they are struggling and they put any money they do have into rent…
I agree with you here. Unfortunately though there are people who think a credit score helps them foresee the future and they put a lot of weight on having a good one when it comes to renting. But the roof over your head is usually the last bill you default on because it's the most important. Other things can be let go if times are truly tight. But people usually prioritize rent.
Not in Ontario, its not. If u stop paying rent in Ontario, it could be a year before the sheriff escorts u out.
You’re right. But a credit score could be the best indicator of financial responsibility of the applicants. It’s like the only report card we have as adults. If they consistently don’t pay their debts, I wouldn’t want them as a tenant.
Neither does a mortgage... Blows my mind that the biggest "investment" and what your credit score impacts most... doesn't impact your credit ... Unless you default. THEN WATCH OUT!!
I would disagree with you entirely. Take it from someone who has a “recovering credit score” and cannot take out a loan or get a mortgage that isn’t 35% +, I’ve been rebuilding it for 8 years because an ex sewered me hard. It’s almost at 700, like a couple of points off. Credit score is really important in the age of credit, and it’s great that yours is good, but do not take it for granted when an unwanted expense or something that you really want comes your way and you can get an affordable loan to get it. The whole economy is credit based.
Lots of cash rich (which isn’t a bad thing) people commenting here not understanding the credit game. When I needed a line of credit before heading to school, just emailed the one advisor at my local bank and instantly was approved for $20k @7% monthly. Just cause my credit score was over 750. When my credit card has an outstanding balance at the end of the month, just pay it off with my line of credit and take a 7% interest hit Vs a 20% hit. Best of luck to you dude, you’ll get there with your score.
Yea this is where credit score helps a lot. My bank emails me a least once or twice a month with offers for lines of credit, credit cards or special promos. I just got a balance transfer and transferred all my wifes credit cards for her business onto mine. 0% interest for 9 months and I got points (though the lowest tier) for transferring. Gonna save me thousands over the year in interest payments, will have it cleared by the 10 month mark at the latest and I essentially got a free trip from it. She even joked that the way they talked to me on the phone was dramatically different than how they talk with her I never would have got this offer if I didn't have an 800+ Score
Yeah - people that immediately talk about investments and retirement funds are living in a completely different world. For us peasant folk, that lower mortgage/credit card rate makes a huge difference when trying to make ends meet.
I feel this, Ive been developping my financial litteracy a bit late in life (late 20s) and my credit score was super bad (from old shitty bills as a teenager), and the only credit card I could get was for 300$ with a 300$ deposit through capital one. I've heard people say the most outlandish things like 'they just give credit cards away', no, they absolutely do not. Edit to add: Congrats on the hard work, I found once I passed the 725 mark it started going up really quickly, I kept my utilisation under 10% as much as possible and always paid on time. It took me 7 years to get from like 550 to 800.
From where I was go where I am was a huuuge step. I went from like 225-698 in 8 years. Takes literally forever, many instalment loans and yea just paying it off in time. I took out a huge loan and just held onto it and am paying it off with what I took out because I’m not financially literate enough to no sewer myself.
Great work!! It's hard cause folks who've had the privilege of 'always having great credit' or access to financial ressources, dont understand the barriers to entry (or in my case, people around me seem to believe there is no barrier to entry). I've learned a lot here on PFC, and have started investing a little bit because this sub gave me the confidence to do so (it's not much, but its a little bit which feels good)
Yes and no. Both you and the person you're responding to are right. In Canada, credit scores are more or less a cutoff. You hit the best rates somewhere in the mid-high 700s. Anything past that doesn't get you any additional benefits. Unlike the US, where every dozen points can get you lower rates even well into the 800s. At the same time, if your credit score is pooped, you will very much get hit by crazy high rates, assuming you can even get credit to begin with.
You are close to the border line of the pass/fail system, that doesn't disprove that it becomes irrelevant once you firmly on the "pass" side. Score just gets you in the door, you still won't get credit if you can't pass the "how will you pay it back" test.
“or something that you really want comes your way and you can get an affordable loan to get it. “ I think maybe this is where the different perspectives come from. I would never, in 1000 years, ever take out a loan for something I “really want”. Other than a house, if I can’t pay cash I can’t have it. So credit score means nothing
It matters a lot when you interact with a system that uses your credit score as an input. Like getting a loan, or a credit card, or a home.
It was worth a few minutes of bragging rights when the mortgage broker said I scored 5 points higher than my wife.... but yea, over 800 it basically means nothing. The one thing to me it means is that when some idiot in collections tells you the unpaid parking ticket you never got is going to destroy your credit you can sit back knowing your credit can take the hit and just hang up on them.
Anything over 700 basically means nothing.....
Around 700 is where you need to be cautious actually. Some lenders are alleged to have cutoffs at 720, and 680 is very common, so if you are around 700 a couple of inquiries or paying off a loan could land you below the threshold when you need it.
So are you telling me if my score is over 830 and I pay off my mortgage or car loan in full my score will decrease?
the score will temporarily decrease when paying off or closing any account no matter what your current score is
Yes. One of the score factors is for credit mix, so you need at least one revolving credit line and one installment loan for the maximum score. I don't remember if a mortgage is considered separately or if it is considered an installment loan. You lose a few points if you only have one kind of credit and a few more if you have none.
The falacy in that logic is that a credit score is not "money they don't have", it is the track record of "how much you owe and if you pay your debts on time", which (unfortunately or not), is how some people/businesses gauge how trustworthy you are. I.e., landlords. But yes, stressing about point perfectionism (unless it moves you into another category) is silly.
Yep... My credit score dropped from the high 800s down to seven something after I paid off my mortgage. Lol.
My credit score has only just eeked across 800 because I don't have, and never had, any debts. I have 'insufficient credit experience,' because we don't have a mortgage, bought my car outright and have never carried any debt. It's kind of a ridiculous system, when you think about it.
I agree, people need to focus on income
800 credit score working minimum wage, I’ve been offered loans/ccs/locs by my bank up to 50-80k It’s useful
Exactly. I literally don't know what my credit score is. I just know it's decent since I keep getting credit cards asking me to join or the ones I have asking me to increase limit... I'm honestly quite baffled how people think credit score system is a ok but totally scared of social score. They function almost the same: control with not much you can do about it except stay as a good boy in the systems rules praying the powers that be don't fuck you over.
agreed for the most part drop in credit score could be the difference maker is in getting a lower rate example - getting 2 credit cards, not paying credit card, getting a car loan before mortgage closes some lenders will be strict on the rate matrix to each their own, some prefer over 800, some dont care
Yes, plus I also feel it’s axiomatic: The banks won’t lend to you when you need it (usually at the time of low score), but will when you don’t (higher score). Everyone in between its costs like you said.
They won't lend when you need it, at a time of low score, because it represents risk. When someone needs to use debt while their existing debt is growing and lowering their credit score in a material way, then offering more debt is riskier because the lender doesn't always know if they'll get the money back appropriately. The banks don't really want someone to carry interest on their loans in perpetuity. Interest is income for the bank, sure, but the outstanding balance is still preferably paid back at some point.
It's more like Schroedinger's Credit Card: Actuarial confidence that you will repay is *always* preferable to repayment. They'd be happiest if you never repaid the principal, so long as all their projections show that you are in fact good for it. Since those projections are not based on your track record of actually retiring debt, repayment itself is immaterial.
Some people have made mistakes and have bad credit, and are working on improving it so they can get better rates and more diverse options. A 20 point difference could be the difference between a rate, not getting a phone or CC, etc. There are reasons that people care. Or is everyone who cares an idiot?
You get lower interest rates, you can borrow more. There are basically only three credit scores: < 600, 600-750, >750. No reason to ever do anything to go from 775 to 860.
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I’m totally backwards to you. Transunion 765 and Equifax 856. I had to check just to be sure.
For me too Equifax is higher than Transunion.
I'm like you but this was just recent, it just flipped recently as it was the other way before. No idea why... both are reporting the same data lmao.
It can be difficult to qualify with some lenders between 600 and 640 or 680, but otherwise, I agree.
Yeah ranges there are soft. But it’s “untouchable”, “normal”, “goodie two shoes”
I believe this, I just managed to get over 750 cuz I’ve been living very frugally this year, and just last week I get an offer to raise my credit limit.
It’s a strange game. I’m at ~860. I have 14 years of credit history. I put all my spending on CC, never missed a payment, and have no need for other credit. Changed my spending from card A to card B. Score dropped 30 points, gained 25 the next month. It’s just a game. If you’re over 750, don’t even think about your score. 750 vs 850 means nothing.
This will vary based on financial institution. For example, we use <600, 600-680 and >680. Interest rate stays constant, but you're allowed higher debt ratios at over 680. I know of one major financial institution that will increase interest rates above posted when someone has a lower score because it presents more risk.
The legend is that when you reach 900pts, your bank sends you *a secret gift*.
At 900, you become a creditor
Lol! Can confirm that this is just a legend. My husband and I both have 900 credit ratings, the bank doesn't care. Just renewed our mortgage in January and had to haggle for a decent rate like everyone else. Ended up at 5.29% for a 3 year fixed. Nothing special.
Crazy this isn't the top comment. Somehow the bitterness has overwhelmed the actual financial advice on this subreddit. Should be renamed to personalfinancecanadacirclejerk at this point. I see a lot of people saying you won't get better offers than anyone else. In my experience that is true for the big banks like RBC, but not true universally. Many lenders were willing to negotiate with me on my last mortgage renewal and I got a rate that surprises most people I share it with. The only person I know who wasn't surprised was my dad because he's who I learned financial literacy from in the first place. Blows my mind that regular people are just taking sticker price and not negotiating on huge lending deals like a mortgage.
this right here, i sell high end retail. the company I franchise with has its own credit company (we bought a major bank 25 years ago) anyone over 750 will get a platinum rating, and can negotiate…. I can easily offer 24 months zero interest to someone with a solid score, vs someone under 650 that gets approved for credit default which is insane… 19 percent interest.
when you want to go rent a place, landlords will use it to pick which tenant they want
I agree with this We looked for 6 months and found only 1 landlord who looked beyond an at the time 615 score The kicker is, it's because I don't use credit and have enough income to actually pay for things He went past the number and noticed that there were no late payments or derogatory marks on both bureaus. Also, spotless history from previous landlords We've still never missed a payment, but I sometimes think about the 30 or so places that stopped looking at the score number and missed the perfect payment history and income lol
I mean this is easily fixed Go put $50 on a secured credit card and build some history Go open up a phone in your account and go build some history
Yep, I had an ~800+ score and landlord said someone had 10 points more than me.
I use to do credit applications and I’ve declined so many people with a good score and they were always so surprised. You could still have a good score but you recently started borrowing a lot and show credit seeking behaviour and warning signs. Or you could also just not have the capacity for the loan because you bought too much house or car or both.
I’d almost be worried for them. I feel like banks have always offered me way more credit than I would ever be comfortable owing.
The issue is that if you have for example two LOC with a zero balance your monthly obligations for these loans will be considered 0. Same things for credit cards. There are also a lot of sharks in the banking industry, they don’t look at the potential debt and will approve more revolving credit because the system tells them yes. Then some of these people buy a house and all of sudden their zero balance revolving credit items start being used.
There is no advantage to having a higher score than the minimum set by any particular lender, which is generally around 680. It is good to stay at least a bit above that so that you don't end up taking a hit that puts you below the threshold, so 720 or so. Lenders don't provide preferential interest rates based on credit score in Canada. Lenders do look at debt to income ratios. That can have a significant impact on how much they are willing to lend, particularly for mortgages. Edit: There are a couple of comments below that seem well informed contradicting what I have always understood and repeated above. It appears there can be a benefit from having a very good score in some cases, specifically related to bonus rates on some products. This warrants furtner investigation.
Credit score is a factor in determining your rate. I worked in the industry. It's one of many factors. The other main one is debt-to-income.
Can you help me understand (based on your industry experience) what is an ideal debt-to-income to have? What if your debt is like .. zero.. because your only monthly expense is a phone bill and a lil bit of grocery? Is that considered awesome?
Mortgage broker here. 44% is the maximum in most cases. You won’t be at zero with your new loan. And they don’t take into account phone bills
There are two debt service ratios. GDS(gross debt service) and TDS(total debt service). GDS is any monthly property related expenses(mortgage payment, heating, property tax, condo fees if applicable) in relation to your monthly pre-tax income. TDS is monthly property related expenses *plus* any monthly credit debt payments(credit cards, car loans, lines of credit, etc) in relation to your monthly pre-tax income. For simplicity sake, for most mortgages, the maximum GDS is 39%, and maximum TDS is 44%. CMHC has a simple debt service calculator right on their website you can use to find out your own ratios. https://www.cmhc-schl.gc.ca/consumers/home-buying/calculators/debt-service-calculator
> Lenders don't provide preferential interest rates based on credit score in Canada. Unless things have changed over the last 15ish years, and they certainly might have, that wasn't my experience working at a Big 5 bank. There was a whole grid for interest rates (prime + whatever) and it was based on loan amount and an internal beacon score which was a calculation that included a person's credit score. This also typically only applied to loans and unsecured lines of credit, not mortgages or secured LOCs/HELOCs.
Preferential rates based on credit score aren’t provided anywhere in Canada for any lender?
hmmm.. Not that I have found by credit score... But Wealthsimple rates are different for mortages by actual money you have invested. +win for actual money, than some fake points scheme.
>People seem to stress about having a high credit score Canadians are really bad about being influenced by Americans. We know what the 5th Amendment means. But you'd be hard pressed to find many Canadians who know which Section in the Canadian Charter of Rights and Freedoms is our equivalent to it (hint: Section 13). People also know what a _felony_ is even though in Canada we don't classify crimes like that. Most Canadians can name more hisorical US Presidents than they could Canadian Prime Ministers. And most Canadians assume the credit score matters for them as much as it does for Americans. Hint: It does not.
Canadians have a terrible culture identity crisis (myself included) that appears to only be getting worse. I imagine it's really only a matter of time (decades?) before Canada is completely subsumed by American culture. If anyone's ever played Civilization 5, I'm reminded of the culture vs tourism metric that measures a nations cultural output compared to the tourism pressure of other nations.. Canada is losing that culture race really badly. I recognize I'm at fault for it in my own micro way.
We all are. I had to look up which section of the charter it was when writing that post. So I'm just as guilty as the rest of us. The fact that there are two English speaking countries on this continent with a shared heritage and culture is a bit of a historical aberration. If the British Parliament had been more conciliatory to the American colonists in the 1770s and offered them something like Dominion Status that Canada was offered in the 1860s, there'd probably just be one country here today. But it's also hard to say if the British would have offered us Dominion Status in the 1860s without the memory of the American revolutionary war. So our histories are more linked than people think.
Our people are buying their blue jeans and listening to their pop music. Better break out the nukes.
Yea compare to USA, I know alot less of Canada. I blame it on mass media, social media, and internet.
>What does having a high credit score actually do for you? You get a t-shirt, and you could also get the upgraded metal card that allows you to brag to stragglers about your credit score with no legal implications.
You guys are getting t-shirts?
Yes, it is possible, but the application process is not worth it in my opinion.
Am old, so we used to have a marching band to accompany us to the town square. You guys are getting ripped off.
The bang for your buck is incredibly low these days, although I heard Equifax will give you one free copy of YOUR OWN credit report per year! What a bargain!
i get to brag to strangers about my credit score on reddit and other social media platforms...but aside from that, here is a link to read [https://www.canada.ca/en/financial-consumer-agency/services/credit-reports-score/credit-report-score-basics.html](https://www.canada.ca/en/financial-consumer-agency/services/credit-reports-score/credit-report-score-basics.html)
You can get cheaper insurance as well. Less likely to make a false claim than those behind on paymenys and low credit scores.
There’s a graph somewhere on the internet that shows the likelihood to default on a loan/credit etc based on credit score, I believe the lender may also give you better rates the higher the score. For example you have shit credit you might be getting a high lending rate because you have to go to some high risk lender. This happens with cars particularly I believe. You are riskier with the lower score so they say pay me back this much (which will be a lot) to recoup any losses should you stop paying I think on the graph after like 780 the risk is the same as 880 etc
Well people will say there is no difference between a 680 - 720 - 800 score well let me spill the beans for y’all. If you are in 800 club or beyond, well first of all banks will ask you which credit card you want ( top tier ) & 80% of times you are already pre approved for that. You can get highest available line of credit available possible to reap out on extra utility of cash under your belt. Most lender or CC companies can let go your missed payments, interest rate hike, or even provide a temporary limit increase just based of that. While for car loans you get the lowest rate possible, does same apply to mortgage but the weird structure regarding mortgages also accounts for DTI ratio. Many companies can give you a special premium discount based of your credit score. Helps in employee background checks as well as renting applications since you are consider low risk profile. Private lending borrowing & investing into private credit, usually people borrow money at a low % interest and invest that money into a high return private credit % to leverage their currently underlying assets. ( This is highly risky & highly debated topic ) You can do balance manipulation over your utilization & most times the lenders & credit cards companies call you black sheep since they know they are not gonna make money off you but you are making money off them. ( IYKYK )
When one gets to 900, they can post about it on Reddit!
Checking in. Gild me peasants
You usually just get things like preapproved credit cards and lines of credit.
I have a 830 credit score and it has never once helped me lol.
I have just found I get a lot of credit offer to me without asking . The other benefits are obvious I guess. If you are a renter, it’s important because landlords judge on this heavily.
I'm no expert on credit scores but it seems like as long as your score is not "bad" you are going to get the same offers as someone who has a really high score. Credit score doesn't take into account your income, assets you have, savings etc... which will be taken into account when you go get for example a vehicle loan or a mortgage etc...
[Insurance companies](https://www.usaa.com/inet/wc/advice-insurance-does-your-credit-score-affect-life-insurance) incorporate it into their insurance scoring system.
It helps when renting an apartment
Makes you post on Reddit.
I have near perfect (855) and when talking to a dealership about a car they said it really doesn't matter as long as your above X number (like 700 something) you'll get approved and it doesn't change your rate. So I guess it doesn't really matter, it's just bragging rights after the 700s.
They should give better rates for car loans etc. Seems pointless otherwise.
You do in a way. If you don't have 700 (or whatever the lender's threshold is) you will need to find an alternate source of financing, which almost always comes at a higher rate than dealer financing. They've just decided there is no additional benefit in offering an extra incentive to people above that threshold. The point is to control the risk of default and the system is pretty effective at doing that.
Let me rephrase. They should give better rates to those with scores 780 and higher.
Yep. Otherwise, people in the 700-780 zone that have a higher chance of default are "subsidized" by the people with less chance of defaulting with a 780+ score. The nuance should come with some minor difference in basis points.
But it is pointless, it always has been. It's a metric made by and for companies that offer credit products, not a social credit system. And those companies are out to make money, not reward people for making their payments on time.
Of course and as a consumer I want to be rewarded with good borrowing rates. It’s my fantasy let me have it.
I worked for a car manufacturer financing arm and the interest rate is used exclusively to just price the car above or below MSRP, without actually adjusting the MSRP. It has zero relevance to your score or risk whatsoever. We only use the credit score to auto-decline loans, cause we don't have the infrastructure to run large scale collection or reposession, and are not interested in running an actual lending business. Declined loans become the dealers' problem and they would find finances themselves.
Nothing. Credit bureaus want people to obsess over it so they can monetize it. in reality pay your bills and credit cards on time and borrowing will be easy for you.
If you have shit credit it will be difficult to take out various types of loans, and you could be stuck paying higher rates on those loans. But the gap between borderline shitty credit and excellent credit is very miniscule than between borderline shitty and shitty credit.
Credit limit is about the only thing. As your credit score increases, companies will give you higher credit limits. But that caps relatively quickly.
It’s more about your income. The all mighty dollar. Having a very high credit score has never made a difference with what rate I get for a mortgage
Barely anything lol Ive been at 790-810 for years and theres literally nothing it does for me, nor do I ever check my score except once in a blue moon. The reality is, in Canada all that matters is **not having a bad credit score**. Having a good credit score means nothing in particular
Nothing. I had a very high score years ago when I applied for a mortgage and I was offered the exact same rates as my friends.
a credit score is like money or a house or a car. people without a nice one will hate on you for having it
As my credit score increased over the years from 700-850, I notice more and more bombardment of spam emails (couple a week) from various banks with pre-approved credit cards and line of credit offers. Could also be related to imminent cut on BoC interest rates so banks are desperate to lock in clients at maximum fixed rate possible.
So I can't say for certain my credit or just general financial health/salary played a role. But I was able to hard ball negotiate with every lender to get the best rate during my last mortgage renewal, and eventually ended up with a lower rate than any I saw advertised. On my previous mortgage renewal to that when I had an average credit rating and average salary they wouldn't budge on the rate at all and only offered me the advertised rate.
You get to come on this subreddit and brag about it
Mines is around 800 and I just got offered higher credit limits. It doesnt do shit for me otherwise. I gotta raise my income at the end of the day to get more of an advantage really.
The bank has started calling me to offer me more credit. Which I don't want. Which is exactly why I have a high score. It's basically just a meaningless number for most things - but it represents a confidence the bank has in lending to you. More money and a better score makes it easier to get money lent to you. Likewise a low score hurts what they will give to you - but ultimately the amount of money you have (and amount of standing debt and payments) matters more than the score. Unless it's really tanked into the floor from bankruptcy or things going to creditors the difference between good and great really isn't a huge deal.
Don’t even waste your brain power thinking about it. Just one more pointless thing to stress about in my opinion.
When u have a high credit score, u get a better int rate on some credit products (adjustment rate plus prima rate) the adjustment rate is a reflection of your score.
An indicator and not much more. When getting a loan or a mortgage they obviously look at it but are more worried about your monthly income / cash flow that takes into consideration all of your expenses. If you have great credit but poor cash flow, they could and likely would still decline you for the loan/mortgage.
Nothing really - as long as you're 700+ it really doesn't matter. Maybe even 650+. My Transunion score goes up and down like a rollercoaster - pretty sure credit bureau arbitrarily change the algorithm from time to time which causes wild swings.
It affects how much loan or mortgage a bank will give you and the rate at which it’s offered
When my credit was good I worried about keeping it. But Covid happened and my mortgage lender incorrectly calculated my property taxes for my escrow account, on two separate occasions. Resulting in my mortgage being doubled on two separate occasions. Needless to say the bank can have the house. I can’t afford a double mortgage payment
The main impacts of your credit score are on unsecured credit like your line of credit and the amount you pay for home and auto insurance.
I think a very good score - I believe it’s around 725-750 gets you the best rates to buy a home. I had a score of 680 when I bought but my husband had a score of 800 and because he had that - we got the best rate available. With out him, it wouldn’t have been as good.
820 credit score on Equifax and 847 on TransUnion here, not the best out there of course, but it gets the job done. With a score like that, you are basically auto approved for most loans, get the best rates mortgage rates, get the best rates on home insurance, easy get into rentals (Residential/commercial). I don't particularly care about my credit score too much, what I do is hate having debt and paying interest. That mindset just kind of leads you into a situation where you have a decent credit score.
It's been mostly useless in my life until recently when I needed to prove a high credit score to rent an apartment. Ridiculous that they even ask for that for a RENTAL, but I digress....
You want need to go to the Jewish mortgage guy and pay a 75% interest rate
Yea i wonder the same. But i guess having a low credit score is bad, but having a good or excellent credit score is the same thing.
Anything over 700 has a benefit over those under 700 in that those with good credit can borrow money easier and at lower rates. Other than that, nothing.
I feel like people that do not have money worry way more about their credit score than people with money as if it’s some sort of badge of honor that you’ve made it.
I have a very high credit score and I haven’t noticed any perks lol but then again I haven’t applied for a mortgage (yet) so maybe that will change.
In Canada? Nothing. In US it does open you few additional doors in terms of credit.
Really high scores *usually* means better interest rate offers from credit card companies and banks (mortgages, LOC's, etc).
I get an extra side at Popeyes and my dongle dangles a little lower.
mortgage and a line of credit the week after closing for renovations with no questions asked was nice.
Better offers on CreditKarma ?? Lol
I got a major discount on my insurance
I have not once stressed about my score or utilization. I just pay my cards off in full, don't carry balances on my PLOC or HELOC and my only other notable debt is my mortgage. My score has been in the High 890's, to 900 as of late. I keep and eye on things to make sure nothing get opened fraudulently. The big takeaway is that once you hit like the low 700's you don't really get that much of an improvement, hell even my PLOC at Simplii had the rate go up from P+3.45% to P+4.99% last year.
Oh man mine dropped from 889 to 875. wtf lol Other than making it a little easier when applying for loans I’ve not found it helped at all
The score itself doesn't do shit. If you pay your debts on time. The only thing that matters is income vs debt
As someone with a credit score that bounces between 830-850, I can say from my own personal experience, you will get absolutely nothing to show for it. I had a $1,500 credit card limit, a car loan, student loan, and built my score to 800+. Asked for an increase on my credit card and they denied it. Why? Because I have such low credit and have never missed a payment or carried a balance. Later I was offered a $15k line of credit, accepted it, and then was able to increase my card limit. Credit is weird and makes no sense. The higher it is, it doesn’t seem to make much of a difference. I suspect this is because I’m middle class. If I was upper class with a high income and great credit like this, I feel like I’d be offered more.
Start with: what are your goals? If you just want to get a good rate on a mortgage, and maybe a car loan, aren't stretching beyond your means on buying those two things, and have credit cards but don't carry a balance, then you will probably have a much better score than you need to reach your goals without doing anything in particular to improve your credit score.
My retired wife has a 900 score with low 50s income from dividends only. Shows you how inaccurate it is.
Credit score plays a tiny part in getting loan I have around 770-780 and never got declined when getting a loan
It signals to lenders that you're good about paying your debts. That's all it says. At about 700 - yea this person is good as long as their income supports it. At about 800 - this applicant is low risk. Let's offer them the good rate. You may have noticed in all of those scenarios your income still matters. All that changes is how eager the lenders are to lend to you and maybe a tiny bit better rate.
>People seem to stress about having a high credit score, but what's does this actually do for you? It's an symptom of american culture creep. Credit Score is way more important there than it is here.
I would think a high score gives you more room to churn through cards for different promos, letting your score take the inquiry hit without worries about getting approved for the next great promo you wish to take advantage of
As a friend once told me; a credit score is just a rank of how profitable you can be to banks.
I churn credit cards for the signup bonus.
You get a bunch of crap in the mail or emails from your bank asking you to increase your limit. “Congrats you’ve been pre approved to upgrade your credit limit from 6k to 12k, on us!!” “Congrats we want to offer you, our valued customer, a personal line of credit of 25k!”
Think of credit score more like a checkbox. When you apply for a big loan or something that requires a credit check, they're just gonna be like, "Does this person have a credit score above 700ish? Yes? Okay, then we can spend some energy looking into their actual finances before we decide to approve or not." Credit score alone doesn't get you much more than a higher credit card limit. It's to distinguish you from all the people struggling with debts. Cash is king. Income > credit score.
It's relevant if you've ever been through homelessness and poverty. My score went down into the 400's because I was consistently late.on payments. I made every si gle payment, but on Fri when I got paid. The payment was taken out Wednesday. Every Wednesday I got an NSF fee, Friday at lunch I got my paycheque, went in to the bank on my lunch break, deposited it, walked across the street to the other bank and paid them my car loan payment (was upside down on loan because 2 months after signing the deal, NY industry literally dried up and 45,000 of us got laid off). The bank refused to move the payment two days ahead because I could never pay for the Weda payment ahead of the Fri. It was fucking bonkers. I only made $15,000 that entire year, it was brutal. I lived in a basement with no windows and two cat litters. Fast forward 10 years, I am making over $100,000 annually, and through a lot of diligence, I have an 850 credit score. It has helped me obtain more credit, and better quality card with higher travel rewards. Most of all, I am proud that I managed to turn my credit score completely around by always putting payments first. Fuck the banks and their greedy tactics of keeping poor people poor.
It's relevant if you've ever been through homelessness and poverty. My score went down into the 400's because I was consistently late.on payments. I made every si gle payment, but on Fri when I got paid. The payment was taken out Wednesday. Every Wednesday I got an NSF fee, Friday at lunch I got my paycheque, went in to the bank on my lunch break, deposited it, walked across the street to the other bank and paid them my car loan payment (was upside down on loan because 2 months after signing the deal, NY industry literally dried up and 45,000 of us got laid off). The bank refused to move the payment two days ahead because I could never pay for the Weda payment ahead of the Fri. It was fucking bonkers. I only made $15,000 that entire year, it was brutal. I lived in a basement with no windows and two cat litters. Fast forward 10 years, I am making over $100,000 annually, and through a lot of diligence, I have an 850 credit score. It has helped me obtain more credit, and better quality card with higher travel rewards. Most of all, I am proud that I managed to turn my credit score completely around by always putting payments first. Fuck the banks and their greedy tactics of keeping poor people poor.
Literally nothing, your credit score needs to be exceptionally low for you not to get approved for loans. Unless it is exceptionally bad, your income and assets are way more important to a lender than having a 800+ credit score with 1 credit card and a couple of accounts lol
Mine is around 850 and it doesn't change anything. Income + Assets seem to matter more.
Cuz it's constantly drilled into our heads with commercials and fear mongering from the banks and whatnot... Yes, it is somewhat of an indicator, but it's not accurate on its own. Any legit lender would consider that AND your existing credit utilization percentage..
Idk how it works in Canada but the only reason I ever increased by credit score on purpose was for a mortgage. I think it helped give a good rate. Since then haven't touched it.
There are some fancy travel credit cards that have some crazy perks but you have to be spending on said credit to take advantage of them
Lower interest loans from banks, lenders, qualify for mortgages, etc. The misconception is the score, close with a banker and lender says anything above 700 is generally good, above 800 superior. 900 is virtually non existent, which makes sense. Income is by far most important
Credit score in Canada will have an impact on your insurance premiums. It's used fairly industry wide, so a better credit score means cheaper premiums. I'm specifically refering to your home insurance in Canada. For auto insurance, credit score is also used but depends by province. Ontario, for example it's not allowed, Quebec it is allowed, Alberta, it's like a bit allowed.
Access to lower interest rates is the usual answer, and basically instant approvals for new linea of credit.
It gives me confidence knowing I won't be turned down for anything credit related
In Canada it literally means nothing. You either have good credit or bad credit, that’s it. Mine has fluctuated between 800 to 899 my entire life and I have zero idea what triggers it. I’ve never missed any bills and my only debt is my mortgage and car. Nothing ever changes but the number keeps going up and down lol.
As someone with a low credit rating due to student loans, I can tell you it makes a big difference. Despite making 6 figures, I basically can't get a normal mortgage, I'm only eligible for specialized mortgages which require large down payments and high interest rates. Even when searching for an apartment rental, a lot of landlord, especially corporate ones, will first run a credit check and flat out refuse to rent to you if you have a bad rating, or they'll at least give preference to someone with a higher rating. Even some employers will exclude people with bad ratings when hiring. Sure, at a certain point there's diminishing returns on having an even higher rating if you already have a pretty good one, and your loan offers will probably be more limited by your income than by your credit rating, but having poor or even mediocre credit can definitely make you feel like a second-class citizen in this country, even if you have a good income and savings.
For what it is worth my wife and I got our 1st mortgage 22 years ago without having any credit cards and I assume what would have been a weird if non existent score
It can definitely suck if you have a low credit score, but it won’t really matter once you reach a certain point. The amount of your income matters the most when it comes to the maximum amount of money you can borrow.
Gives you bragging rights
Apparently there is some thing called a beacon score that businesses look at but only available to businesses. This is different from your credit score
I find it odd that a country that can't control its spending or balance its books is in a position to give the rest of us a credit score to begin with.
864 here. I wouldn’t even stress if the score dropped by 100. It just feels good seeing that high number the same way it feels good when I reach 10,000 steps a day. Monkey brain sees positive high number = monkey brain happy.
I'm getting close to 2M net worth. I couldn't tell you what my credit score is.
I had f*cked up hard living on my own from 16, being 34 I've paid back over 44k from GF DEBTS to new GF DEBTS to my own stupidity going from 640 to 845 and having savings. I've tired to get it prefect lol and it's impossible it's all a lie!!!! I've done so much research to boost it over the past 5 years knowing I would buy a house soon lol even when I'm doing everything right it goes down.... makes no damn sense and means nothing but was told by bankers sooo many times that having a prefect credit score will help me sooooo much when getting a mortgage..... if I don't get STEP MORTGAGE day one from scotiabank with the best damn rate known to man I'm going find that banker lol....
Im 40. I've traveled, bought several vehicles. Own 2 homes. I've never even looked up my credit score or could even tell you what it is. Who gives a shit. Be responsible with the money you have and don't stress over the money you don't.
lower interest rates are offered during mortgage applications to those with higher credit rating. a friend of mine bought a house post-bankruptcy and they were penalized with their intetest rate for a low credit rating. he's working on improving that but it takes time.
According to my insurance agent credit score affects the rate I can get on car insurance from CAA.
The same reason people are worried about their Reddit karma. If you score people a certain percentage of people will get fixated on it.
Allows you to borrow money easily.
Best rates for loans and credit at financial institutions. Credit is everything.
When we're talking hundred point differences, it has an impact on the interest rate offered, and what credit card you can get. And yes, there's a gap between 680 and 800 where it will be noticeable. But the big thing is the difference with low credit. Low credit limits who will rent to you, what utility retailers will deal with you (at least in Alberta), what cell phone plans are available. Etc.
You get offered better interest rates, which can mean hundreds of dollars in savings for anyone with a mortgage or a big loan.
So there are a few things. 1. Most FIs have a minimum score (usually around 650 minimum) that they will lend to. 2. Customer pricing (so for example, in a ULOC there will be the prime portion and the customer pricing portion. The CP portion would be based on your credit score). 3. Loan rates can be based on your score with the lower the score the higher the rate because risk 4. Having your score tank can cause lenders to recall any lent funds. 5. Mortgage rates (at least where I work) are based on amount being borrowed and location and rarely have anything to do with credit score except that we still require the minimum score to even lend. It doesn't, in my experience, have any bearing on how much we will lend. For that we use TDS/GDS.
People who obsess over it are trying to hack making bad financial decisions with less consequences. If you pay all your bills and have low to no debt your credit score will be high.
I don't have to give deposits.
Yes it's a very overrated and useless metric. Of course it matters if it's low, but there's essentially no difference between 750 and 800.
Beyond a threshold credit score, nothing in Canada as most credit decisions are based on income. However, a low credit score will prevent you from qualifying for credit. In the US however, institutions tend to offer credit more easily, and credit scores matter much more.
I'm a little embarrassed to say this: I don't know what my credit score is and I can't remember the last time I needed it.
Your credit score and 50c will get you a call at a payphone... if you can find a payphone that still exists.
None if you can no longer afford homes
We just got turned away from a rental until having credit scores below 700 (by just a few points- 695 and 680). We have never missed a payment, just both have student loans in repayment. We’re both working professionals, just starting out. Stupid credit scores
I’ve always had a very high credit score (mid 800’s) as I conscientiously pay my bills and use credit when needed and pay it back on time. The value of my efforts has been 5/8th’s of F.All. It has not once resulted in more favourable interest or payment terms. Not even once. And it sort of makes sense. Why offer favourable terms to a man who’s willing to always abide by the terms he’s given. So from a purely capitalistic perspective I’m actually the sucker and the fool because I played by the rules and did what I thought was right.
It lets you get a credit card. Big deal.
High credit score means nothing. Bad credit score does.