How to get a 900 credit score in Canada

Credit scores play a crucial role in financial matters, influencing everything from loan approvals to interest rates on credit cards and mortgages. Credit scores may also influence your approval process for rental or job applications.

This three-digit score ranging from 300 to 900 may seem insignificant if you're unfamiliar with credit scores, but it holds a lot of power. Credit score ratings reflect your credit history. A perfect credit score is 900, and the closer you get to this number, the better your chances of getting ideal financing terms.

While you likely have a budget and savings, you'll likely need some help reaching your milestones, like buying a house or splurging on a vacation. We explore how you can get a 900 credit score rating in Canada to help you secure the credit required.

What is a good credit score in Canada?

The average credit score in Canada is around 680, which is considered a good credit score based on credit scoring models from credit bureaus. A good credit score ranges from 660 to 724. However, this range may differ slightly based on the scoring model used by the major credit bureaus.

A good credit score takes time to build, and it involves consistent good credit management skills, such as timely payments, low credit utilization rates, a diverse credit mix, and minimal credit checks. Individuals with good credit scores are typically viewed positively by lenders and can access a range of financial products at competitive rates.

The lowest credit score in Canada is 300. A very good credit score typically ranges from 725 to 759, and anything above 760 is considered an excellent score by credit bureaus. Individuals with excellent credit scores qualify for the best interest rates and terms on loans and credit products. They also have access to credit cards with lucrative rewards and benefits.

How are credit scores calculated?

Understanding how a credit score is calculated provides insight into how you can achieve an excellent credit score. Your credit score is made up of several pieces of information found on your credit report.

Payment history

Payment history makes up 35% of your credit score. It is the most significant factor in credit score calculations. Lenders want to see a consistent record of on-time payments for credit accounts, such as credit cards, loans, and lines of credit. Late payments, defaults, and other negative marks can significantly impact your credit score.

Credit utilization ratio

Credit utilization refers to the ratio of your current credit balances to your credit limit. High credit balances relative to your credit limit can indicate financial strain and may negatively affect your credit score. Keeping a credit utilization ratio of around 30% can help improve your credit score. This factor makes up 30% of your score.

Length of credit history

The length of time you've had credit accounts open impacts your credit score. Generally, a longer credit history is more favourable for lenders because it provides more data for lenders to assess your creditworthiness. A long history of healthy credit management skills also shows lenders you have a lower credit risk. The length of your credit history has a 15% weight for your overall credit score.

Credit mix

Credit mix influences 10% of your credit score. Lenders like to see a mix of different credit accounts, such as credit cards, instalment loans, lines of credit, and mortgages. Having a diverse mix can positively impact credit scores, as it demonstrates your ability to manage different accounts responsibly.

New credit

New credit makes up the remaining 10% of your credit score. Opening multiple new accounts in a short period can be a red flag, as it may suggest financial instability or a need for too much additional credit. Each new credit inquiry also temporarily lowers your credit score, so be strategic with your credit applications.

How long is your credit history?

Credit history refers to the duration for which your credit accounts have been active and reported to credit bureaus. This history begins when you open your first credit account, like a credit card or student loan. The length of your credit history is an important factor in determining your credit score, with longer histories preferred by lenders.

Credit scoring models often consider the average age of accounts when calculating your credit history. A longer average age indicates a more established credit history, helping you reach a high credit score. A longer credit history also provides lenders with more data to assess your credit profile. Consistent on-time payments and responsible credit management over an extended period demonstrate stability and reliability, which can improve your score.

Benefits of a 900 credit score

Having a credit score of 900 is the highest achievable score for most credit scoring scales. If you have a 900 credit score, congratulations! It is an impressive feat for your personal finances. There are several benefits to having an exceptionally high credit score.

Access to the best financial products

While a 900 credit score isn't necessarily required to unlock lucrative financial opportunities, it certainly improves your chances significantly. Individuals with a 900 credit score have access to the most favourable terms and conditions on loans, credit cards, mortgages, and other financial products. Lenders view these borrowers as extremely low-risk borrowers, so they may qualify for the lowest interest rates, highest credit limits, and most generous rewards and benefits.

Low interest rates

With a score of 900, you're likely to qualify for the lowest interest rates available in the market. It means you'll pay less in interest over the life of your loan and may enjoy lower monthly payments, saving you significant money over time.

High credit limits

Lenders are more likely to extend high credit limits to individuals with a credit score of 900. A higher credit limit allows for greater purchasing power and flexibility, which is beneficial for large purchases or emergencies where access to credit is essential.

Premium credit card offers

People with excellent credit scores often receive pre-approved offers for premium credit cards with exclusive benefits, such as travel rewards, cash back, concierge services, and luxury perks. These cards may have higher annual fees but offer much higher value for high-spenders and frequent travellers.

Quick loan approvals

A 900 credit score can expedite the loan approval process since lenders have confidence in your ability to repay debts. It can be advantageous when applying for time-sensitive loans, such as mortgages and auto loans.

Negotiating power

A perfect credit score gives you strong negotiating power with lenders. You can leverage your excellent credit profile to negotiate better terms, such as lower interest rates and fees.

Lower insurance premiums

Some insurance companies use credit scores to determine premiums for auto and homeowner's insurance. Individuals with an excellent credit score may qualify for the lowest insurance rates, resulting in significant savings on insurance premiums.

8 ways to achieve a perfect credit score

Pay your bills on time

Payment history is crucial for your credit score. A credit bureau takes data from your payment activity to report whether you consistently make on-time payments and if you have any late or missed payments. Ensure you pay all bills on time every month to build a strong payment history.

Keep your credit utilization low

Credit utilization is the amount of credit you're using compared to your total available credit. Aim for a credit utilization rate of around 30%. A lower credit utilization ratio means you aren't overusing credit.

Build a long credit history

The length of your credit history matters, accounting for about 15% of your overall credit score. Start building credit early by opening credit accounts responsibly and keeping them open over time. Avoid closing old accounts unless necessary, as it can shorten your average account age.

Diversify your credit mix

Have a diverse mix of credit accounts, but only open new accounts when necessary. Ensure you manage your accounts responsibly and keep track of billing cycles and payment balances.

Limit new credit applications

Each credit application generates a hard inquiry on your credit report, which can temporarily lower your score. Limit the number of credit applications you submit, especially within a short period.

Monitor your credit report

Check your credit report from a credit bureau, different credit score apps, or your financial institution. Review your information regularly and identify errors or fraudulent activities to ensure your credit profile accurately reflects your financial health. Dispute inaccuracies promptly to prevent them from harming your score.

Avoid negative remarks

Negative remarks include late payments, collections, foreclosures, and bankruptcies. These remarks can stay on your credit report for up to ten years and contribute to a low credit score. Practice responsible financial habits to avoid these remarks, and work with professionals to minimize their impacts if you have them on your credit report.

Be patient and persistent

Achieving a perfect credit score takes a lot of time, patience, and consistent effort. Focus on maintaining good credit habits over the long term, and your credit score will gradually improve.

How do you check your credit score in Canada?

You can check your credit score online, by mail, or by phone from a credit bureau or a financial institution. You may be requested to provide identification, such as your Social Insurance Number, driver's license, or passport, before providing a copy of your report.

Credit bureaus give you a free copy of your report annually, but you can always pay for a copy of your credit profile. You can also request a free credit score from your credit card provider, a financial institution, or a credit reporting agency. The information from your financial institution or credit reporting agency may differ from the report you get from a credit bureau. However, the discrepancies are typically minor.

KOHO can help you work towards a perfect credit score

Earning a perfect credit score is challenging but not impossible. Building a foundation of healthy financial and credit management skills increases your credit score over time and ensures you spend money wisely and within your means. You can build your credit with KOHO using our intuitive tools and expert guidance.

Our resources give you guidance for budgeting, tools to track your spending, and insights on your credit profile. From a virtual credit card for your everyday spending and overdraft protection coverage your credit accounts to a high-interest savings account to earn interest from your savings, we've got you covered every step along your financial journey.