Your credit score plays a major role in your financial life in Canada. It affects whether you’re approved for credit cards, loans, mortgages, and even rental applications.
This guide explains how credit scores work in Canada, what affects them, and how to improve yours over time.
What Is a Credit Score?
A credit score is a three-digit number that represents how trustworthy you are as a borrower. It helps lenders decide whether to lend you money and at what interest rate.
In Canada, credit scores typically range from 300 to 900.
Credit Score Ranges in Canada
| Credit Score | Rating | Meaning |
|---|---|---|
| 300–559 | Poor | High risk |
| 560–659 | Fair | Limited approval |
| 660–724 | Good | Approved by most lenders |
| 725–759 | Very Good | Better interest rates |
| 760–900 | Excellent | Best offers available |
Who Calculates Credit Scores in Canada?
There are two main credit bureaus:
- Equifax Canada
- TransUnion Canada
Both collect data from lenders and generate your credit report and score.
Your score may differ slightly between bureaus — this is normal.
What Affects Your Credit Score?
1. Payment History (35%)
Paying bills on time has the biggest impact on your score.
Late or missed payments can significantly lower your score.
2. Credit Utilization (30%)
This is how much credit you’re using compared to your limit.
Best practice:
Keep usage below 30% of your total credit limit.
3. Credit History Length (15%)
Older accounts help your score because they show long-term responsibility.
Avoid closing your oldest credit card unless necessary.
4. Credit Mix (10%)
Having different types of credit helps:
- Credit cards
- Car loans
- Lines of credit
5. New Credit Inquiries (10%)
Applying for too many credit products in a short time lowers your score.
How to Check Your Credit Score in Canada (Free)
You can check your score for free using:
- Equifax Canada
- TransUnion Canada
- Many Canadian banks (RBC, TD, Scotiabank, BMO)
Checking your own score does NOT hurt your credit.
How to Improve Your Credit Score
- Pay all bills on time
- Reduce credit card balances
- Avoid unnecessary applications
- Keep old accounts open
- Check your credit report for errors
Improvement takes time, but consistency matters.
How Long Does It Take to Build Credit?
For beginners, you may see a score within 3–6 months of responsible use.
Major improvements typically take 6–12 months or longer.
Common Credit Score Myths
❌ Checking your score lowers it
❌ Closing cards improves credit
❌ Income affects your score
All of these are false.
Final Thoughts
Your credit score is a long-term financial asset. Understanding how it works gives you control over future opportunities like better interest rates and approvals.
Start small, stay consistent, and your credit score will grow.