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What's An Average Credit Score For Canadians And Why Does It Matter?

Some employers may look at your credit score when applying for certain jobs.

10/02/2017 20:13 EDT | Updated 11/22/2017 13:10 EST

You can tell a lot about a person by the food they eat, the clothes they wear or the car they drive.

Not because those items will reveal much about a person's character but because those meals, outfits and vehicles were probably paid for with a credit card. And if someone has a credit card, that means they've got a credit score.

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A credit score is a three-digit number telling people and companies how much of a financial risk you are when it comes to lending money.

Credit scores are three-digit numbers with far-reaching consequences. They are essentially a snapshot that tells people and organizations how good someone is at paying back debt. The average Canadian scores around 600, with numbers in the 700 and above considered "very good."

Credit scores can go up and down depending on your financial situation. Racking up student loans, signing up for multiple credit cards or taking a line of credit all impact your score.

But ultimately, how much and how quickly you pay back that debt is what impacts that magic number. Maxing out your credit, missing payments and carrying balances month-to-month will all lower your score. Paying back whatever money you owe is what builds it back up.

The average Canadian scores around 600, with numbers in the 700 and above considered "very good."

And while that three-digit number isn't as vital to have memorized, say like the CVV on the back of your credit card or your area code, it becomes crucial when you need to make a big purchase like buying a home or a car. Some companies may even look into it to see how responsible you are with spending when applying for a job.

Canadians curious about their credit score have essentially two choices if they want to find it out. Neither are free but Equifax and TransUnion both offer online access, though the former was recently hacked in a data breach.

Now that you know what a credit score is and where to find it. The next step may be to build it up or keep in tip-top shape. To do that, check out the video above for some helpful financial advice.

More financial advice from Wiser Wallet:

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