How understanding your Credit Score can unlock discounted travel opportunities

Did you recently see a Maldives post from an influencer on Tiktok or Instagram? Are you craving a vacation, but with high inflation, your income can only provide so much? While these are good questions, and a good answer is a good credit score. 

Yes, a great credit score can significantly impact your chances of getting a travel credit card for your next dream get-away! If you are unaware, travel credits often have high credit score requirements, but the rewards they provide allow you to access travel at a much discounted rate. By understanding this important concept, you can use a great score to your advantage to access basic and premium travel credit cards.

What is a Credit Score, why does it matter?

According to the Government of Canada, our credit score is a three-digit number rating (ranging from 300-900) that credit bureaus use to determine how well you handle debt. A good credit score would be 750+. This is a key number to remember, as this is the point at which you start unlocking your travel opportunities, which are through the travel credit cards. Good travel credit cards are gated behind good credit scores. While income and total debt are factors, a score above 750+ can go a long way! 

A good credit score comprises of:

• Payment History - 35%: How consistently you’ve made your payments on time.

• Outstanding Debt - 30%: Current debt you owe could be credit card debt, car loan, mortgage, etc.

• Credit History Length - 15%: The longer you’ve had your credit account open, the longer, the better.

• New/Recent credit inquiries - 10%: Each time you apply for a credit account, your credit score goes down.

• Types of Credit - 10%: Varies types of credit affect your credit score, the golden rule is to use responsibly. However, it is not necessary to have many types of credits to improve your score.

Ensuring you are making your payments and monitoring your score indicates you are good at handling credit, but also on top of your finances. Accessing points for your next destination, without guilt, works well if you pay your balance in full, not just the minimums. 

PRO TIP: Your student credit card or your first basic credit card is essential to keep at all times. Try to keep the account as long as possible to increase trust with the lender.

How do I check my Credit Score?

There are various credit monitoring companies that can provide you with the information you need. Such as CreditKarma, Borrowell, and mobile banking apps of the major Canadian banks. You can try directly requesting information from Equifax or TransUnion.

PRO TIP: Getting a perfect score is not any better than 760, so you don’t need to perfect your score like on a test!

I just checked the app and I have a good score, or at least I know I pay card in full at every statement. Now what?

Now it’s time to fill out your credit card applications! Having a well-maintained credit profile will come in handy when applying for cards in the medium and premium range. Let’s look at how Credit Card applications fare for your credit score.

American Express cards have been the foundation for anyone looking to jumpstart their travel through credit cards. The company offers a wide variety of cards, like the signature Platinum Card or the foundational Cobalt Card. A Cobalt may be forgiving, but a Platinum Credit may need a bit more “woo-ing” from your credit score if you are below 750. The rewards on these cards are truly marvellous, and you are missing out on a lot of discounted and almost-free travel potential. How much are you missing out? More on this in a future article about understanding Credit Card points. 

Recap:

A good credit score and the essential knowledge of balancing your personal finances are your key to getting rewarded. You could think that credit card rewards are there to reward you for making sure you are on top of your bills! This is because the points you earn are truly free and aren’t being paid off by interest you had to pay missing your payments. After all, who wants to think of a bad bill coming back from a relaxing trip from the Maldive beaches and flying business class to get there, am I right?

We have just named a few highly sought-after travel credit cards above, but it can be confusing how to ensure which card matches your needs. That’s why hopping an exploratory call with the BeyondRedemption team to see what opportunities we have for your next journey! 

Book an exploratory session with Tristan to see how getting the right credit cards can align with your travel goals and reach your dream destinations.