Many people often think of their credit in terms of the binary good or bad. There are actually many different levels of credit rating, depending on your credit score. In order to find out which type of credit score you have, you must first find out what your credit rating is. There are a variety of free services available to find out your credit rating, many of which will expedite the speed that you receive your rating for a small fee. 

How is your credit score calculated?
There are a number of factors and variables which go into calculating your credit score. Many people who are familiar with how credit scores function and affect your ability to get loans and mortgages don’t know how they are actually calculated. If this sounds like you, continue reading this brief synopsis or learn more from here. It can be useful to utilize online resources, but in some cases, it can be helpful to seek additional help if you are still unsure. Some factors which are taken into consideration when calculating your credit score include: 

• How frequently you pay (or don’t pay) your bills. If you don’t pay your bills on time, then it can have a very negative effect on your credit score. Setting up automatic payments can help keep this under control.

• How much of your credit limit you use. It is more desirable to have a higher credit limit and maintain a low balance, as opposed to a low credit limit which you have almost reached. 

• History of credit use. If you start using credit early on and maintain good standing by paying your bills regularly then you will begin to accrue good credit early on. The earlier you start using credit the easier it will be to obtain more later on (if used responsibly).

• Types of credit you use (loan, mortgage, credit card). By using a variety of kinds of credit you can grow your credit rating quickly. 

• History of bankruptcy. If you have a history of bankruptcy then you may have some difficulty obtaining additional credit, or good interest rates. 

Range of credit ratings

Within the Canadian system of calculating the credit, the range of credit rating is between a score of 300 and 900. This means that if you have a credit score of 300, you have the worst possible credit rating. If you have a score of 900, that means you have the best possible credit rating. However, within the range of these two numbers, there are several levels of credit rating which fall into their own categories. Generally speaking, if you have a credit rating above 650 then you are in good standing and should be able to access whatever loans or mortgages you apply for. Conversely, if your credit rating falls below 650 then you may find difficulty applying for more credit, loans, or mortgages. 

Types of credit scores

Credit scores are grouped into different levels depending on where they fall on the scale between 300 and 900. Here are the different levels of credit rating:

• If your credit rating is 780 or higher, then you are considered to have excellent credit. This means that you will be approved for almost any loan or mortgage you apply for with the best possible interest rate. 

• A credit score between 779 and 720 is considered a very good credit rating. This means you will be approved for almost any loan or mortgage with great interest rates.

• Credit scores that fall between 719 and 680 are considered to be good credit ratings. This is generally where most people who use credit fall in the spectrum. Your interest rates will be good, but typically a little higher than someone who has a higher credit rating.

• If your credit score is somewhere in the range of 619-580 then you have a poor credit rating. This range of credit usually means that you will have some difficulty getting loans or mortgages, and if you do then you will generally be subject to high-interest rates. 

• A credit rating, which is below 579 and above 500 is considered to be a very poor credit score. If you fall in this range, unfortunately, you will have trouble being approved for any kind of credit or financing. 

• Finally, if your credit rating is 500 or lower then you have a terrible credit rating. This means that you will have an extremely hard time being approved for any kind of loan or mortgage. If you do then you will be subject to the highest possible interest rates. 

If you have found your credit score to be within a range that may cause complications when applying for new loans or mortgages, there are a number of steps that you can take to help improve your credit rating. Doing things like paying off your credit card before the payment is due can help. Maintaining your credit card so it doesn’t get close to your limit will help increase credit. Increasing your limit (and not using it) can quickly increase your credit limit.