What Does a 660 Credit Score Mean in Canada?

A 660 credit score is below average, but good enough to access most credit and lending products. Your credit score is a 3-digit number that lenders and other creditors look at before approving you. When you apply for a loan, the lender will check your credit score to determine the terms of your loan and what interest rate you get.

It is an evaluation of your creditworthiness. In other words, how well can they trust you to repay the debt as agreed?

The credit score ranges in Canada are from 300 to 900, with the poorest being 300 and the best being 900. A higher credit rating will give you a better chance of getting a loan, mortgage, or credit card. According to Equifax, 660 is in the range of good credit scors. Here’s what to expect from with a 660 credit score and tips to improve it.

Why Do You Need a Good Credit Score?

Your credit score dictates the kind of loans you can get and affects your lifestyle. Your financial capacity will generally affect the things you can purchase and the property you own. It would really help if you strived to get a higher credit score to live comfortably and save more money with better interest rates.

Want to know all there is to a 660 credit score? Read below!

What Does It Mean To Have a 660 Credit Score?

You may request your credit score from either Equifax or TransUnion, the two leading credit bureaus in Canada. If you have a 660 credit score, do not feel downcast, you are doing great! By ranking here, you are at the high end of “fair.”

The top credit bureaus in Canada, as mentioned above, determine your credit score. Scores fall within different ranges to tell creditors how well you manage debt. The credit score ranges are as follows:

• 800 – 900: Excellent
• 740 – 799: Very Good
• 670 – 739: Good
• 580 – 669: Fair
• 300 – 579: Poor

Your credit score is a combination of different factors. Before a credit bureau issues your credit score, they will consider your credit history, payment history, debt-to-income ratio, public records, and credit inquiries.

A fair credit score means that you mostly pay back your loans in good time. However, it shows that there is still room to increase your credit score. It also means that you are eligible for many basic loans with fair interest rates.

What a 660 Credit Score Cannot Do For You

As good as a 660 credit score may seem, it is only “fair” in the eyes of creditors and cannot get you everything you need. As you already know, a 660 credit score is below average in Canada. Average signifies something normal; there is indeed nothing special about being average, and below that shows there is some work to do.  

You tend to qualify for the most basic and regular loans. On the other hand, a 660 credit score cannot get you a competitive loan option with a low interest rate. In the end, it still presents some limitations when it comes to accessing credit products, services, and other agreements that involve a financial commitment, like renting an apartment or a getting a cell phone plan.

With fair credit score, you cannot have it all. You would have to settle for a loan with higher interest rates or less desirable terms. Either way, a 660 credit score will limit your loan options.

What a 660 Credit Score Can Do For You

On the flip side, a 660 credit score can offer you some great deals. For starters, it qualifies you for basic car loans. Most car loan creditors require a minimum credit score of 630-650 before they approve your loan. 

Thus with a 660 credit score, you can access many types of loans, just not the most competitive ones. For example, you can get a mortgage with interest rates around 7%. Be sure to shop around to find the best rate for your situation, not just for mortgages but for any financial product you need.

A 660 Credit Score and Credit Cards

A fair credit score will allow you to access a variety of credit cards, such as secured and unsecured credit cards, prepaid credit cards, etc. You might not get the best credit cards with rewards on the market, but most standard ones should be available to you.

A secured credit card is often secured with a cash deposit to the company before it is issued. The rationale is to protect the card issuers in case of any default of payment on your part. They can recover any loss by retrieving your initial deposit. The said initial deposit becomes collateral against any balance you owe.

An unsecured credit card is a regular credit card. It does not require any initial deposit before you can get one. The only criteria are to apply for the card, and once you get approved, you can start using it.

Prepaid cards offer amazing benefits and discounts for their users. Many prepaid card issuers in Canada offer eye-catching and mouth-watering discounts to their card holders. This will help put money back in your pocket.

Can I Get a Home With a Credit Score of 660?

In 2021, the Canadian Mortgage Housing Corporation (CMHC) lowered the minimum credit score for getting an insured mortgage from 680 to 600. Great news if your credit score is 660! Aside from that, most lenders have a standard requirement of at least a 660 credit score before you qualify for a mortgage, but it generally ranges between 620 and 680 depending on the lender.

With a 660 credit score, you have a real shot at homeownership. For the home of your dreams, though, you’ll need to have an appropriate downpayment and be able to afford the mortgage payment and related costs.

How to Improve a 660 Credit Score

A 660 credit score is not bad, but not stellar either, sitting just below average. This means that there are higher scores and most certainly room for improvement. 

But, you are treading in safe waters if you have a 660 credit score. You may live comfortably, but you can make your life even more comfortable. If you want to be better at handling your finances and improving your credit score, here’s what you should do:

#1. Pay Your Bills On Time

Attached to every loan repayment plan is a due date; a hard and fast deadline by which the lender must receive your payment. Due dates ensure that you repay the loan on time. In addition, if you keep to the set deadlines, you will build trust with your creditors.

To improve your credit score, make sure your creditors always receive your payment on or before the due date. Budget wisely and stash away some money used only to repay your loan. For lenders, a person’s ability to keep up with their payment obligations indicates that they can take out a loan and pay it back.

If possible, you can even make your payments before the set time, and extra payments too. If you are diligent with your loan payments, you will surely see an increase in your credit score.

#2. Reduce Your Credit Utilization Ratio

Your credit utilization ratio compares the credit limit on your credit card to the balance you owe. It is an indication of how much you depend on credit to finance your lifestyle.

If your credit utilization ratio is low, it means that you do need to use your credit card to afford the things you need, nor do you max it out when you do use it. Therefore, a low credit utilization ratio is what you need and will subsequently improve your credit score because it shows you are financially stable.

A high credit utilization ratio indicates that you overuse your credit card, likely because you depend on it to cover shortfalls in your budget or lack financial discipline. Higher balances owing put you at higher risk of becoming overindebted and defaulting on your debt obligations.

You can take two actions to lower your credit utilization ratio. First, you can reduce what you owe by paying down your credit card balance, and not racking up the balance again. The second is to increase your credit card limit without increasing what you owe. Ideally, you should both: increase the limit and pay down your credit card debt.

If you do this, your credit score will grow from 660 to 750 or even more in no time.

#3. Increase Your Credit Limit

Your credit limit is the total amount you can spend on your credit card. It limits how much debt you can take on by capping how much credit you have access to while you have the card. If you max out your credit limit, ie the balance you owe is the same as your credit card limit, it will damage your credit score.

You should apply for a higher credit limit to raise your credit score. You can get use credit cards to rebuild your credit then, when your credit score increases, raise your limit. This only works if you can stop yourself from spending more on the card.

#4. Monitor Your Profile

There are a lot of things on your credit profile that affect how your total credit score is calculated. So, invariably, your credit score will be a reflection of the data that is available on the profile. Since creditors report to the credit bureaus on a regular basis, your credit score will fluctuate often.

However, data is just information about you, your credit behaviour, and how you manage the debts you owe. It is gathered and reported by humans who make mistakes. A lower credit score could be the result of errors in your credit report. Spend some time ensuring that your information is accurate and up to date by cross-checking it with your own records, like statements and records of payment.

There are many free services, like Borrowell, that let you check your full credit report as many times as you want without hurting it. You can also track your progress on your creditor’s website.

Read More: 10 Ways to Get Your Credit Score for Free in Canada

#5. Get a Secured Card

A secured credit card is a card that requires a cash deposit to serve as collateral in case you default on your payments. It also incentivizes you to keep up with your payments and make wiser decisions so you don’t lose that money. When you pay off the balance and close the card you get your deposit back. Also, secured cards are famous for helping people improve their credit scores.

Read More: The 8 Best Secured Credit Cards in Canada

Conclusion 

With a 660 credit score, you are on to greener pastures, especially if you previously had a lower credit score. But, conversely, the euphoria of having a higher credit score can cause you to feel too relaxed; less concerned with increasing your credit score further. A 660 credit score is considered “fair” because it is below average, so it is in your best interest to work on improving it.

The goal is to become better at what you constantly do. In this case, the goal is to grow your wealth and make better financial decisions. To see such an improvement in your finances, you should take proper care to act on the tips provided above. Then, you’re on to something great!