What is a bad credit score in Canada?
Credit score depicts a person’s creditworthiness and it usually ranges from 300 to 900. Based on what range your credit score is, it can be said to be good or bad. A credit score that falls between the range of 300 to 575 is considered bad credit.
People with bad credit scores usually have a history of money borrowed, overdue bills, money laundering, or debt. In Canada, there is a policy of debt settlement for people who are in great debt and cannot repay back the due money. You can get out of debt by paying only a fraction of the money that you actually owe. You can pay a percentage of the owed money and the creditor discharges the rest of the amount.
What are the impacts of a bad credit score?
Here are some of the major impacts of a bad credit score in Canada:
- It is very difficult to sanction a loan from banks or lenders. This is because once you have a bad credit score it is assumed that you cannot repay back loans with the interest within the due period of time. Even if a loan is approved, a higher rate of interest is charged.
- On a scale of 300 to 900, most people in Canada have a credit score of 650. But, within the same range, a good credit score in Canada only starts from 660 and above. Therefore, the average credit score in Canada is fair. This also indicates that a large population in Canada have credit score within the range of 300 to 575, which falls under bad credit score. These people find it difficult to avail of loans for any purpose. Therefore, there are services in many cities of Canada like Calgary, Alberta, Edmonton, and more, where bad credit help is provided to the people. People in Calgary could avail of bad credit help of up to $1500 irrespective of what their credit score is. Bad credit helps in Calgary and in other cities of Canada are usually short-term loans. These loans, like any other loans, need to be repaid with interest within a given period of time.
- It is difficult to rent houses when you have a bad credit history. Based on your credit scores landlords determine if you will be able to pay the rent in due time and hence decide if they would rent the house to you.
- A bad credit score makes it difficult to get a job. Many companies run a credit check before hiring a person. This is to ensure that the employee they will hire is trustworthy or not and if he/she is fitting for a finance or accounting-related job where you have to deal with money.
In a 2016 survey done by CareerBuilder, 72% of employees said that a background check had been done on new hires. 29% of employees run a credit check as a part of the evaluation process on new hires. Thus, maintaining a credit score is vital. For more information on how to improve bad credit score, visit the website of Credit720.