5 min read

 770 credit score good or bad

Written By

Justin da Rosa

Credit scores in Canada come in a wide range and that three-digit number can have a lot of influence over your short-term and long-term financial goals. When you have a credit score of 770, you might be wondering if that’s a good score or a bad score. According to Equifax Canada, one of the country’s two major credit bureaus (organizations that issue credit scores), a 770 credit score is considered to be very good and is a high credit score. It is actually higher than many average scores in Canada depending on where you live. So, what does that mean exactly for your finances to have a credit score like this? Let’s break it all down.

Credit scores in Canada

Your credit score, typically spanning from 300 to 900, acts as a numerical summary of your financial standing, shaped by various factors. Simply put, the higher your score, the more appealing you appear to credit bureaus and potential lenders. A robust credit score unlocks a host of financial advantages, such as access to low-cost loans, improved job prospects—especially in sectors scrutinizing credit history like financial services—and increased chances of securing rental properties.

Here’s how Equifax rates its credit scores:

  • Scores between 300 and 579 are considered poor/bad

  • Scores between 580 and 669 are considered fair/average

  • Scores between 670 and 739 are considered good/moderate

  • Scores between 740 and 799 are considered very good

  • Scores between 800 and 900 are considered excellent

The average credit score in Canada, according to TransUnion, is 650. If you’ve got a credit score of770, that means you are actually in very good standing and have a credit score that is generally considered to be a high credit score in Canada.A score of770 is a great score and will generally be seen in a positive light by lenders. It is a score that many people shoot for when trying to improve their credit. And even at this high score level, there are still things you can do to improve your score and to help keep it at that high level. More on that in a bit. First, though, let’s take a closer look at the average credit scores in some of Canada's major cities.

City Average credit score Vancouver 705 Victoria 694 Calgary 667 Edmonton 649 Saskatchewan 659 Saskatoon 656 Winnipeg 661 Toronto 696 Ottawa 688 Montreal 687 Quebec City 683 Halifax 664 Fredericton 658.

As you can see, a 770 credit score is higher than all of the average scores seen in each of these cities. There are several reasons why your score can rise and fall even as you try to maintain a high score, like many of these score averages. There is a lot to keep in mind as you review your credit scores.

Factors that negatively impact your credit score

Several factors contribute to the gradual decline of your credit score over time. Credit bureaus gather information on each Canadian to calculate credit scores, and certain individual actions can lead to a diminishing score. These include:

  • Late or Missed Payments: Failing to meet loan payments, whether for credit cards or other financial obligations, significantly impacts your credit rating. About 35% of your credit score depends on your ability to consistently fulfill loan obligations and make timely payments. It's crucial to examine your credit history for any instances of missed payments.

  • High Utilization Ratio: A high utilization ratio indicates nearing the upper limit of available credit. For example, maintaining an $8,000 balance on a credit card with a $10,000 limit results in an 80% utilization ratio, which is considerably elevated. To effectively boost your credit score, it's advisable to keep your utilization ratio below 30%.

  • Age of Credit: The age of your credit accounts is a significant factor, influencing up to 15% of your overall credit score. This underscores the importance of thoroughly reviewing your credit history before considering account closures. A well-balanced range of credit accounts demonstrates a lengthy track record of responsible credit management.

  • Past Negative Credit Events: Prior credit challenges like bankruptcy or collection issues have a detrimental impact, contributing to a 10% reduction in your overall credit score. While credit rehabilitation is possible, these entries can linger on your credit record for years.

  • Credit Inquiries: Credit inquiries, categorized as soft and hard inquiries, document each instance of accessing your credit file. A hard inquiry, resulting from seeking new credit, can reduce your credit score, while a soft inquiry has no impact. Inquiries account for 10% of your overall credit score and should be monitored, especially when seeking new credit.

How to improve your 770 credit score

Credit scores are numerical representations of an individual's creditworthiness, typically ranging from 300 to 900, evaluating their history of borrowing and repaying loans. These scores play a pivotal role in financial dealings, influencing the ability to secure loans, credit cards, mortgages, and favorable interest rates. They are calculated based on various factors including payment history, credit utilization, length of credit history, types of credit used, and new credit inquiries.

A high credit score signifies responsible financial behavior, leading to better loan approvals and lower interest rates, potentially saving money over time. It's a measure used not only by lenders but also landlords, insurance companies, and even potential employers to assess a person's reliability and trustworthiness in handling financial commitments. Maintaining a good credit score requires consistent timely payments, managing debt responsibly, and keeping credit utilization low. Overall, credit scores wield significant influence in shaping financial opportunities and stability in various aspects of life.

Now that you have a better understanding of credit scores in Canada and their functioning, let's explore how you can enhance your own score, even if it's currently at 770 or at a similar level.

  1. Timely Bill Payments: Ensure the punctuality of your payments, spanning credit cards, loans, and utilities, as this significantly impacts your credit score. To maintain a solid financial track record, consider setting up reminders or automatic payments to avoid late or missed payments.

  2. Reduce Credit Card Balances: Efforts dedicated to lowering existing credit card balances can mitigate the negative impact on your credit score, particularly when balances are high relative to your credit limit. Aim for a credit utilization ratio below 30% and avoid maxing out your credit cards.

  3. Diversify Your Credit Portfolio: Enhance your credit score by cultivating a well-rounded mix of credit types, encompassing credit cards, loans, and a mortgage. Exercise caution when acquiring new credit, ensuring responsible management and a consistent payment history.

  4. Maintain a Long Credit History: Building credit is a gradual process, and the length of your credit history holds significant weight. Keep older accounts open to contribute to the average age of your accounts, as closing them may shorten your credit history, potentially lowering your credit score.

  5. Regularly Monitor Your Credit Report: Obtain a free annual copy of your credit report from major bureaus and scrutinize it for inaccuracies, reporting discrepancies promptly for correction.

  6. Limit New Credit Card Applications: Apply for new credit judiciously, as each application triggers a hard inquiry that temporarily lowers your credit score. Space out applications to minimize their impact.

  7. Establish a Positive Payment History: If you have limited credit, consider alternative methods like secured credit cards or becoming an authorized user on someone else's card. Consistently pay off balances to build a positive payment history.

  8. Seek Professional Guidance: In the face of financial challenges, consult a reputable credit counseling agency for personalized assistance, valuable insights, support, and strategies to build your credit score.

  9. Build credit using a credit building tool: There are certain financial products that are designed to help you build credit over time. One of those is KOHO’s Credit Building. For as little as $7 a month, you can use this service to help establish a positive credit history.

KOHO offers three different ways to build your credit, so you’ve got options. All three options come with access to a Financial Coach and your credit score, on demand.

When contemplating a loan—be it for a mortgage, car, or line of credit—grasping your credit score's significance becomes pivotal. Lenders hinge their assessments and offered interest rates on this metric. A superior credit score amplifies the chances of securing favorable loan conditions. Thus, staying informed about your credit score becomes imperative, profoundly impacting the opportunities available for borrowing and the accompanying interest rates proposed by lenders. Understanding this score's role is paramount as it shapes the landscape of borrowing, dictating the possibilities and terms that might be accessible to you.

Note: KOHO product information and/or features may have been updated since this blog post was published. Please refer to our KOHO Plans page for our most up to date account information!