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10 Ways to Get a Credit Score For Free in Canada.
Your credit score can have a big impact on your financial future. Looking to obtain your credit score for free? You’re in luck, as there are now several options available to you. Gone are the times when you had to shell out $20 or more to TransUnion or Equifax just to view your credit score.
What Is A Credit Score in Canada And Why Is It Important?
A credit score in Canada is a numerical rating that represents a person’s creditworthiness, similar to the credit score system in the United States. In Canada, credit scores range from 300 to 900, with a higher score indicating a lower risk of defaulting on a loan or credit product.
300 – 559 → Poor
560 – 659 → Fair
660 – 724 → Good
725 – 759 → Very Good
760 – 900 → Excellent
The credit score in Canada is calculated based on factors such as the person’s payment history, credit utilization, length of credit history, types of credit used, and recent credit inquiries. These factors are used to generate a credit report, which is used by lenders, banks, and other financial institutions to assess the likelihood of a borrower repaying their debts on time.
Having a good credit score in Canada is important because it can affect your ability to borrow money, obtain a credit card, get a mortgage, or even rent an apartment. A high credit score indicates that you are a responsible borrower who pays bills on time and manages credit responsibly, which can result in lower interest rates, better loan terms, and more credit options.
On the other hand, a low credit score indicates that you may be a higher-risk borrower, and lenders may charge higher interest rates or deny your application altogether. Therefore, it is important to maintain a good credit score in Canada by paying bills on time, keeping credit card balances low, and managing credit responsibly. Additionally, checking your credit report regularly and correcting any errors can also help improve your credit score over time.
Check out the resources listed below, to acquire your credit score for free and receive updates weekly, monthly, or quarterly.
Borrowell: Borrowell provides free credit score and credit report monitoring services to Canadians. You can check your credit score once a month for free without affecting your credit score.
Credit Karma: Credit Karma offers free credit scores and reports, as well as credit monitoring and personalized recommendations. It uses TransUnion to provide your credit score and report.
Credit Sesame: Credit Sesame offers free credit scores, credit monitoring, and personalized recommendations. It uses TransUnion to provide your credit score and report.
Mogo: Mogo offers free credit score monitoring and identity fraud protection services. You can access your credit score once a month for free.
Ratehub.ca: Ratehub.ca offers free credit scores and reports, as well as credit monitoring and personalized recommendations. It uses Equifax to provide your credit score and report.
RBC: RBC provides free credit scores and reports to its customers through its online banking platform. You can access your credit score and report once a month for free.
Scotia Bank: Scotia Bank also provides free credit scores and reports to its customers through its online banking platform. You can access your credit score and report once a month for free.
National Bank: National Bank offers free credit scores and reports to its customers through its online banking platform. You can access your credit score and report once a month for free.
TransUnion: TransUnion offers free credit scores and reports to Canadians once a month through its online platform.
Equifax: Equifax offers free credit scores and reports to Canadians once a month through its online platform.
How to Apply for a Free Credit Score
There are several ways to apply for a free credit score. Here are some options:
AnnualCreditReport.com: This is the only website authorized by the federal government to provide free credit reports from each of the three major credit bureaus (Equifax, Experian, and TransUnion) once a year. You can visit the website, fill out some basic information, and request your free credit report.
Credit Karma: Credit Karma provides free credit scores and credit reports from Equifax and TransUnion. You need to create an account, provide some basic information, and get your credit score and report.
Discover Credit Scorecard: Discover offers a free credit score and report from Experian to anyone, not just Discover cardholders. You can sign up for the Credit Scorecard online by providing some basic information.
Experian Boost: Experian Boost allows you to improve your credit score instantly by adding your utility and telecom bills to your credit report. You can sign up for Experian Boost for free and get your credit score and report.
Bank or Credit Card Issuer: Some banks and credit card issuers provide free credit scores to their customers as a perk. You can check with your bank or credit card issuer to see if they offer this service.
Remember, it’s important to regularly check your credit score and report to monitor your credit health and detect any errors or fraudulent activity.
What Makes Up Your Credit Score?
Your credit score is a number that represents your creditworthiness, which is how likely you are to repay your debts. Credit scores are used by lenders, landlords, and even some employers to evaluate your financial history and determine if you are a reliable borrower.
There are several factors that go into determining your credit score, including:
Payment history: This is the most significant factor in your credit score. Your payment history shows whether you have made on-time payments on your credit accounts, such as credit cards, loans, and mortgages.
Credit utilization: This is the amount of credit you have available compared to how much you have used. High credit utilization can be a sign of financial strain and may lower your credit score.
Length of credit history: This considers how long you have been using credit, including the age of your credit accounts and the length of time since your most recent activity.
Credit mix: This looks at the types of credit you have, such as credit cards, loans, and mortgages.
New credit: This considers the number of new credit accounts you have opened recently and the number of credit inquiries on your report.
These factors are used to calculate your credit score using a formula developed by credit scoring companies such as FICO and VantageScore. Different factors may be weighted differently depending on the credit scoring model used.
How to improve credit scores and how Often Are Credit Scores Updated?
To improve your credit score, you can follow these tips:
Make on-time payments: The most important factor affecting your credit score is your payment history. Make sure you pay all your bills on time, including credit cards, loans, and utilities.
Keep your credit utilization low: Your credit utilization ratio is the amount of credit you’re using compared to your credit limit. Keeping this ratio low (ideally below 30%) can improve your credit score.
Don’t close old credit accounts: The length of your credit history is another important factor in your credit score. Closing old credit accounts can shorten your credit history and hurt your score.
Check your credit report for errors: Errors on your credit report can negatively impact your credit score. Check your credit report regularly and dispute any errors you find.
Apply for credit sparingly: Applying for credit too often can lower your credit score. Only apply for credit when you really need it.
Credit scores are typically updated once a month, but the frequency can vary depending on the credit bureau and the creditor. Some creditors may report your account activity more frequently, while others may only report quarterly. It’s a good idea to check your credit score regularly to ensure that all your information is accurate and up-to-date.
It is important to keep in mind that the policies of companies and agencies can change frequently. Therefore, do not be surprised if some free services are converted into paid services. However, there are still numerous options available for obtaining your credit score report for free.
After going through this blog, your next logical move toward purchasing a home should be to gather more information on the various options available for obtaining a low-rate mortgage. Your credit score holds a critical place in the eyes of lenders when you apply for a mortgage. It not only determines your eligibility for the loan but also plays a significant role in the terms and conditions offered. A higher credit score will typically result in lower interest rates and more favorable terms. Click Here to gain insights on mortgages, make informed decisions, and avoid mistakes.
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