Is 850 A Good Credit Score

What Is The Average Credit Score In Canada

While credit scores in Canada range from 300 – 900, the average is around 650, according to TransUnion, though it varies from province to province. Once you’ve reached a credit score of 650 or higher, you’ll be able to qualify for more financial products. A credit score below 650 is going to make it hard to qualify for new credit, and anything you are approved for will likely come with very high-interest rates.

Do you know your credit score? You can use Borrowell to get your credit score in Canada for free. With Borrowell, you’ll get weekly credit score updates, see exactly what’s impacting your credit score, and get personalized tips on how to improve your score. You can also find your free credit score here.;

Check out this infographic that shows the average credit scores in Canada:

Why You Shouldnt Settle For A Good Credit Score

While there isnt much of a dividing line between excellent and perfect credit, the gap between a good score and an excellent one is much wider.

A good credit score, which would typically be in the 700 to 759 range can still make approval decisions easier but it puts you at a disadvantage where interest rates are concerned.

Going back to our previous example with the $250,000 mortgage, having a score of 755 would qualify you for a rate of 3.616%.

That would raise your monthly payment to $1,139 a month, which doesnt seem like a huge jump until you consider the overall interest cost.

Good credit also makes a difference where credit cards are concerned.

Take the , for example. This card is designed for people with average credit and it offers unlimited 1.5% cash back on every purchase.

That seems like a pretty sweet deal but it comes at a price in the form of a $39 annual fee. Youd have to spend $2,600 a year just to earn enough cash back to cover the fee.

Now, consider the , which is geared towards people with excellent credit.

With this card, you earn 1% cash back when you make purchases and another 1% back when you make a payment.

Theres no annual fee and unlike the Capital One QuicksilverOne Card, you can get a 0% introductory rate on purchases and balance transfers.

If you use credit regularly, thats a good incentive to try and take your score to the next level.

How To Go From Good To Great

To borrow from Leo Tolstoy, all great credit scores are alike, but all bad credit scores are bad in their own way. That is, ideal credit scores are built on a similar set of healthy financial habits, but your scores can be damaged by any number of factors. There are many different issues that;can hurt your credit, such as:

Late or missed payments. Too many open credit accounts. High credit card balances. High balances on loans.;Too many credit applications.

The first step toward improving your credit health is avoiding getting trapped in the highs and lows of managing your credit.

Heather Battison, vice president of;TransUnion Canada;explains how consistency is key: The most important factor for building and maintaining your scores is to pay your bills on time and in full each month. This activity demonstrates your ability to responsibly manage credit and can positively impact your credit scores.

Its also key to remember that your payment history isnt just about paying your credit card bill. It also includes things like your cellphone bill, says Trevor Gillis, associate vice president of account management at;TD Credit Cards.

Gillis says building good credit scores is based on using your credit card responsibly, which means making at least the required monthly minimum payment , making your payments by the payment due date and keeping your credit card utilization low.

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How To Keep A Great Credit Score

The tips above are helpful for obtaining a great credit score, but also for keeping it once you achieve that goal. Here are three other ways that you can keep your credit score solid gold:

Since credit history is an important metric, in most cases you wont want to close a credit card, even if you dont use it regularly. Thats because holding a credit card for a long time can have a positive effect on your credit score. So even if you dont use it on the regular, you dont have to close it. And if you feel like the credit card issuer wants you to use it occasionally, set it up as the place where you have a small subscription auto billed. Just dont forget to pay it!

Which brings us to our next tip: You might want to set up automatic payment to ensure you never miss a payment. That can happen more easily than you might think if youre out of town and dont see a statement come through, or accidentally pull out a card you rarely use to charge a meal and then forget to pay it at the end of the month.

And finally, keep that credit utilization low. That means you dont want to run up your cards, even if you intend to pay them off at the end of the month. Instead, you might ask the credit issuer to increase your limit or you could apply for a new credit card and pay attention to how you allocate your monthly spend to ensure that you are spreading it out evenly.

Tips To Get A High Credit Score

For years, its been widely reported that fewer than one percent of American adults have a FICO credit score of 850.

So, how did Stevens and Ulzheimer climb to the top of the credit-score mountain? Both of them say it was a slow trek that was aided by responsible handling of debt.

Ulzheimer says some of the control over your credit rests with you, while some of the control is out of your hands.

Just like a professor who grades your college coursework, credit-scoring models grade you on your credit activity. So while you might think you deserve a perfect score, the professor or in this case, the credit-scoring model has the final say over your grade.

How do you improve your credit?

Theres no quick fix. Improving your credit health takes time, but the most important behaviors can be summed up as this: Pay your bills on time and reduce the amount you owe. It also helps to check your credit reports regularly and dispute any errors you see, such as a collections account that hasnt been removed from your reports after seven years from the original delinquency date.

Based on the experiences of Stevens and Ulzheimer, what follows are some things you can do to aim for the FICO 850 mark .

Keep in mind, though, that their circumstances are unique, and what theyve done to achieve a FICO 850 score might not work for you.

Heres the advice they gave:

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Fico Credit Score Range: Where Do You Fall

The average FICO credit score is 703, according to Experians 2019 Consumer Credit Review. The average bottomed at 686 during the housing crisis in 2009, when there was a sharp increase in foreclosures, but since then, the average has steadily risen.

To see where you stand, consider FICOs credit score range:

California Holds The Top Five Areas With The Highest Concentration Of People With Perfect Fico Scores

Looking at the concentration of perfect FICO® Scores by metropolitan statistical area , California held all top five spots. The San Luis Obispo-Paso Robles, California, area had the highest concentration of perfect FICO® Scores, with 2.27% of its scores reaching 850, according to Experian data from the fourth quarter of 2018. Oxnard-Thousand Oaks-Ventura, California, and Santa Rosa-Petaluma, California, came next with 2.15% and 2.13% of people with perfect scores, respectively. San Jose-Sunnyvale-Santa Clara, California, came in fourth with 2.03% of all scores being perfect. And finally, San Francisco-Oakland-Fremont, California, came in fifth with 1.99% of all FICO® Scores reaching 850.

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What Is A Fair Credit Score Range

Fair credit score = 620- 679:;Individuals;with scores over 620 are considered less risky and are even more likely to be approved for credit.

In the mid-600s range, consumers become prime borrowers. This means they may qualify for higher loan amounts, higher credit limits, lower down payments and better negotiating power with loan and credit card terms. Only 15-30% of borrowers in this range become delinquent.

Experts Consider A Score Above 780 To Be Excellent

The two primary reasons that a perfect credit score is overrated is that reaching the 850 level provides little benefit to the individual, and attempting to take advantage knocks you from the lofty perch, said Kevin Haney president of Growing Family Benefitsand previously an executive with Experian. An 850 score gains no advantage over someone at the 800 level 50 points lower. Experts consider a credit score above 780 to be excellent. Most consumers with ratings in this range garner the best borrowing terms and cheapest insurance premiums .

In other words, most lenders and insurance companies do not differentiate offers in a meaningful way to people with excellent scores the top 20%.

Read: 30 Things You Do That Can Mess Up Your Credit Score

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Common Trusts Mastercard Credit Card

Paying attention to your credit score and maintaining its strength is a vital part of your comprehensive financial health. Common Trusts Mastercard Credit Card is a card you can afford to carry and can help you start your credit journey towards excellent financial standing. Using a credit card enables you to build a good credit score when used correctly, and we are here to advise you on best practices.

We invite you to learn more about our exceptional Mastercard Credit Card, perfect for shopping, travel, and emergency use here.

Where To Go From Here

Its important to pay down your balances and keep your credit utilization under 30%. Its also wise to have a mix of installment and revolving accounts.

Of course, you also want to make sure you are making your payments on time from here on out. Even one late payment can be very damaging to your credit.

Length of credit history also plays an important role in your credit score. You want to show potential creditors that you have a long, positive payment history.

Give Lexington Law a call for a free credit consultation at and get started repairing your credit today! The sooner you start, the sooner youll be on your way to having excellent credit.

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Continue To Pay On Time

Youve already established a history of amazing credit by paying your bills on time and never missing a payment. To increase your credit score from 820 to 850, continue to pay on time. This might seem like an obvious answer, but missing a payment can drop your score into the Very Good range if youre not careful.

How To Earn A Very Good Credit Score:

As with borrowers in the excellent/exceptional credit score range, borrowers labeled as “very good” by their FICO;Score will have a solid history of on-time payments across a variety of credit accounts. Keeping them from an exceptional score may be a higher than 30% debt-to-credit limit ratio, or simply a short history with credit.

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Why Is A Good Credit Score Valuable

Now you know a little about where scores come from. But that doesnât explain why good credit scores are so valuable. Credit scores are often associated with credit card or loan applications, but their influence goes beyond that.;

Good scores can affect interest rates, credit limits, housing applications and even job prospects. And they can offer more options, more bargaining power and more financial flexibility.

Pre-Approval, Pre-Qualification and Comparing Offers

For starters, you may be pre-approved or pre-qualified for more credit card offers if you have a good score. That may allow you to compare offers and find the best fit for your situationâwhether youâre looking at mortgages, credit cards or auto loans. But if youâre shopping around, be sure to understand how credit inquiries can affect your credit.

Interest Rates and Credit Limits

If youâre approved for a loan or a credit card, a good credit score could mean higher credit limits, lower interest rates or both. And when youâre paying less in interest, you may have smaller payments and be able to pay off your debt faster.;In general, that means that higher credit scores could decrease the cost of borrowing money.

Beyond Credit Cards and Loans

Finally, good credit scores could affect other parts of your life, too:

Can I Get A Personal Loan Or Credit Card W/ A 850 Credit Score

Like home and car loans, a personal loan and credit card is incredibly easy to get with a 850 credit score.

A secured card with Discover or Capital One might be an option, but you may have to pay $500-$1000 just for a deposit. The fine print is confusing and more often than not youâll end up in a worse situation than before you got your secured card. You can save a ton of headache by repairing your credit and waiting a few short months until your score improves.

A 850 score means you likely have few-no negative items on your report. Removing those negative items is usually the quickest way to fixing your report, but in your case, credit history matters much more.

We recommend speaking with a friendly credit repair expert online to help guide you through this process. Your consultation is completely free, no-pressure, and will set you on the right path toward boosting your score.

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Why Experts Say 760 Is The Credit Score To Aim For

While it might be exciting for some to aim to join the 850 club, it comes with no additional benefits that you likely won’t already get with a 760 score.

“The best published interest rates for auto loans are 720+ and for mortgages 760+,” financial expert John Ulzheimer, formerly of FICO and Equifax, tells CNBC Select. “As such, I always tell people, shoot for 760 or better. That way, they’re safe for all loan types and cards.”

For Jim Droske, president of the credit counseling company Illinois Credit Services , the threshold is 760 as well. But he says aiming for 780 is even better to be “the safest” in any type of lending situation. Anything higher, though, won’t be more beneficial, nor would it get you a better offer with more favorable terms.

“If you’re above 760, or 780, certainly you’re already getting the best you can get,” Droske tells CNBC Select. “You’re already hitting that pinnacle of what care about.” A high enough credit score shows lenders and credit card issuers that you are less of a risk and more likely to pay back the loan, versus if you had a lower credit score.

“Anything above that is really just maybe a little pride,” says Droske. “When you have already reached the summit, no need to look for a ladder.”

Dont Fret If You Dont Have The Highest Credit Score

Credit scores are not fixed theyre constantly fluctuating with everyday actions. Making purchases with your credit card and paying down your credit card balance, for example, affect your credit. Your score is also affected by things you cant control, such as the age of your accounts.

That said, if you reach that perfect 850 credit score, you may not remain there long. But lenders dont particularly care whether your score is 850 or 790, noted credit expert John Ulzheimer, who describes a score of 760 or above as the sweet spot for credit.

Your credit isnt the only factor that affects your eligibility for credit. Your income and whether you own your home can also influence your eligibility, for example.

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Why Is Having A High Credit Score Important

While its not necessary to have an 850 score, its important to maintain a high credit score. This will make it easier for you to buy a home, purchase a car and even get a job.

Your credit score shows your history of repaying your debts and making your monthly payments on time. If you have an excellent or even perfect credit score, the lender assumes youre not a risky investment because they assume that you will treat new credit as you have credit in the past and pay it back responsibly.

But, if your credit history shows that you dont pay your bills on time, some lenders may be hesitant to extend you a line of credit. They may be more concerned that this pattern will repeat itself, and they will be out that money.

Many workplaces are increasingly looking to hire employees with high credit scores. Thats because a good credit score demonstrates a history of financial responsibility.

Does Income Play A Role In Having A Perfect Fico Score

Income is not a factor in determining your FICO® Score. While access to some credit products can be restricted by your income and financial situation, when it comes to achieving a perfect credit score, income is not a barrier.

In fact, in the fourth quarter of 2018, a little over 38% of perfect FICO® Scores were held by people with an estimated average annual income of $75K or less, according to Experian data.

Obviously, having more money can help you pay your bills, but building a healthy credit score really comes down to the basics of paying your bills on time every month and maintaining low , or the amount of debt you carry compared with total credit available.

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