What Credit Score is Needed for a Credit Card?

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Have you ever wondered what credit score is needed for a credit card in Canada? In most cases, you’ll need a credit score of at least 660, but that’s not always the case. Each credit card provider has different criteria when approving customers for credit, so you could even get declined if you have a credit score of 800+.

Generally speaking, you always want your credit score to be as high as possible when applying for a credit card. That said, since various factors are involved during the approval process, you must look at the whole picture.

What is a good credit score?

Before you get obsessed with what credit score is needed for a credit card in Canada, you need to understand how credit score ranges in Canada work. 

Your credit score is a number between 300 and 900. The higher your number, the more creditworthy you are. Your credit score is ranked based on which category your number falls under.

  • Poor – 300 – 559
  • Fair – 560 – 659
  • Good – 660 – 724
  • Very good – 725 – 759
  • Excellent – 760+

The two major credit bureaus: Equifax and TransUnion, determine your score based on your credit history. This would include payments from credit card issuers and mortgages. You can check your credit report and score for free via Borrowell

What credit score is needed for a credit card in Canada?

Every credit card company will have different criteria when determining your creditworthiness, but in most cases, you’ll need a minimum credit score of at least 660. This would put you in the good standing range.

Those with excellent credit scores usually won’t have too many issues when filling out a new credit card application. Their chances of approval are high.

That said, there are a few types of credit cards that will approve you even if you have a score range of just 600 – 659. Even though your credit score would just be considered fair, you might still be approved.

What some borrowers may not realize is that you can still get approved for a credit card even if you have a poor credit score. A secured card requires a security deposit, which acts as their credit limit. This benefits cardholders as it’ll allow them to rebuild their credit score.

What other factors affect credit card applications?

Too often, people focus on what credit score is needed for a credit card. While your credit score is essential, some other factors can also affect your application status:

  • Annual income – Credit cards are tiered. Some of the best credit cards have an annual income requirement of $80,000 – $100,000. If your income doesn’t fall in that range, you won’t qualify for the card.
  • Available credit – Some banks don’t like you having too much available credit. For example, if you already have a credit card with a financial institution, they may not approve you right away for another credit card.
  • Length between applications – A few financial institutions don’t like it when you apply for multiple credit cards within a short period of time. For example, they may not approve you if you applied for another credit card within the last 90 days.
  • Personal information – When applying for a credit card, some banks may want to verify the information you’ve entered before approving you.

What determines your credit score?

Since your credit score is a significant factor that will determine your chances of approval, you should strive to improve yours. You can do so by examining the five factors that affect your credit score.

  • Payment history – By making your payments for your purchases on time, you can improve your credit score. Avoid missing any payments at all costs.
  • Amount owed – The amount of credit you’re using relative to the amount you have access to is known as your credit utilization ratio. The lower your credit utilization rate is, the better it is in the eyes of the credit bureaus.
  • Length of credit history – The longer you have credit accounts open, the better. That’s because the credit bureaus will be able to see a history of your credit use.
  • Types of credit – Generally, credit bureaus like to see people with access to different types of credit, such as credit cards, mortgages, cell phones, and other loans.
  • New credit applications – When applying for new credit, your credit score will decrease by a few points. In addition, credit bureaus don’t like it when people apply for multiple forms of credit in a short period.

Recommended credit cards for different credit scores

Now that you know what credit score is needed for a credit card, you can consider one of the following credit cards:

Scotiabank Passport™ Visa Infinite* Card

  • $150 annual fee
  • 30,000 Scene+ points when spending $1,000 in the first 3 months
  • 10,000 points when spending $40,000 in the first year
  • Earn 3 Scene+ points per $1 spent at Empire owned supermarkets
  • Earn 2 Scene+ points per $1 spent on eligible grocery stores, dining, entertainment, and daily transit purchases
  • Earn 1 Scene+ point per $1 spent on all other eligible purchases
  • Visa Airport Companion Program membership + 6 passes per year
  • No foreign transaction fees

For those with a credit score of 660 or higher

The Scotiabank Passport Visa Infinite Card is the best all-in-one travel credit card. It comes with a generous welcome bonus, has no foreign transaction fees, and you get airport lounge access. In addition, this card earns you Scene+ points, which can be redeemed for various things, such as travel, groceries, and movie tickets.

Tangerine Money-Back Credit Card

  • No annual fee
  • 10% cash back up to $1,000 in spending ($100 cash back) for the first 2 months
  • 2% cash back on up to 3 categories
  • 0.5% cash back on all other purchases

For those with a credit score of 600 to 659

The Tangerine Money-Back Credit Card has a slightly lower credit score requirement. What makes this card good is that you get to choose up to three categories where you’ll earn 2% cash back. All other purchases would give you 0.5% cash back. While this card is pretty basic, the rewards are easy to understand, and there’s no annual fee.

KOHO

  • No annual fee
  • $20 for free when signing up with a referral link
  • Earn up to 5% cash-back
  • 1% cash back on groceries and transportation
  • 0.5% interest on your spending and savings accounts with direct deposit set up

For those with a credit score of 599 or less

KOHO is a prepaid credit card, so you’ll be guaranteed approval regardless of your credit score. If you want to improve your credit score, you can sign up for KOHO’s optional credit building service. It’ll cost you $10 a month, but at least you can rebuild your credit history.

About Barry Choi

Barry Choi is a Toronto-based personal finance and travel expert who frequently makes media appearances. His blog Money We Have is one of Canada’s most trusted sources when it comes to money and travel. You can find him on Twitter:@barrychoi

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