How Your Credit Score Impacts Your Interest Rate

How Your Credit Score Impacts Your Interest Rate

November 18, 2022    Credit Score

Your credit score is a three-digit number that lenders, such as banks or credit card companies, use to determine your reliability as a borrower.

If you make consistent bill payments on your loans, phone bills, credit cards and so on, you likely have a higher score. Meanwhile, missing payments (among other factors) can hurt your score.

Having a strong credit score is important because it affects whether you’ll qualify for loans, the quality of the loans you’ll receive and more. Let’s get to understand how credit influences your loans and how you can protect your credit below!


From a traditional lender’s perspective, your credit score predicts the future. If a bank sees that you have a low score (300 to 579), they’ll assume you’re riskier to lend to.

As a result, they’ll try to protect their loan investment by charging higher interest rates on loans (whether that be mortgages, auto loans and so on). The more you ask for, the more they’ll charge you. The same applies to credit card companies, which will offer credit cards with higher interest rates (typically in the range of 25–36%).

These higher costs can make it harder to pay off bills as well. If you’re concerned about paying off debt, you’re not alone. In fact, 42 per cent of Canadians feel the same way.

There are some easy ways you can improve your score. Here are some easy do’s and don’ts!


  • Make credit-building payments (phone bills, credit cards, etc.) consistently and on time. For credit cards, it’s best to fully pay them off at the beginning of every month.
  • Stay below your credit card limit. Try to stay under 30%!
  • Use your credit card for necessities, such as groceries.
  • Use Equifax or TransUnion to check your credit once per year to track your progress.
  • Use one of our car loans on your next ride.


  • Make too many hard inquiries. Hard inquiries refer to credit checks that are made when you apply for credit cards, apartments, mortgages and so on. By limiting your applications, you’ll reduce their impact on your credit.
  • Miss payments. To stay on top of your payments, keep track of your spending and mark important bill payment days on a calendar.


Sometimes life is out of our control. You might have a poor credit score, but we don’t believe that automatically makes you a risk to lenders. Traditional lenders will see a low score and default to charging high interest but we take a different approach. We issue car loans with our in-house financing, which means the money comes directly from us. This gives us the freedom to create loans in a better way.

When creating car loans, we look at your entire financial situation. Our Bad Credit Car Loans don’t automatically have high-interest rates because all Manitobans deserve a vehicle. If you’re interested in taking out a car loan or learning about other ways to build credit, get in touch with one of our Financial Services Managers.

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