Your Canadian credit score is a three-digit number between 300 and 900 that summarizes your creditworthiness — your history of borrowing and repaying money. Lenders use this number to make decisions about approving you for credit cards, loans, mortgages, and lines of credit, and to determine what interest rate you qualify for.
Understanding how your score works, what affects it, and how to improve it is one of the most financially valuable things you can do as a Canadian. A difference of 100 points on your credit score can mean the difference between qualifying for the best mortgage rates or paying a premium rate — a gap that can cost tens of thousands of dollars over a 25-year mortgage.
Credit scores in Canada range from 300 to 900. Here is how the ranges are interpreted by most Canadian lenders:
The average Canadian credit score sits in the 660 to 720 range. Most major banks prefer scores of 660 or above for standard credit cards and 700 or above for premium products. Mortgage qualification typically requires 600 minimum for insured mortgages through CMHC, but better rates come with scores above 700.
Both Equifax and TransUnion use similar scoring models that weight five primary factors:
The most important factor. Paying every bill on time, every month, is the foundation of a good score. Even one missed payment — a credit card payment 30 days late — can drop your score by 50 to 100 points and remains on your credit report for up to six years in Canada. Set up autopay for at least the minimum payment on all accounts to prevent accidental late marks.
How much of your available credit you are using. Keep this below 30% on each card and overall. Above 30% starts to hurt; above 50% hurts significantly. Paying down balances is the fastest way to improve your score.
How long you have been using credit. The average age of all your accounts, plus the age of your oldest account, both matter. This is why closing old accounts is risky — it reduces your average account age. Start building credit as early as possible and keep old accounts open.
Having different types of credit — a credit card, a car loan, a line of credit — demonstrates you can manage various credit products responsibly. You do not need every type, but having at least two different types of credit accounts generally helps.
Each time you apply for credit, a hard inquiry is recorded on your report. Hard inquiries temporarily lower your score by 5 to 10 points each. Multiple inquiries in a short period compound this effect. Shopping for a mortgage typically counts as a single inquiry if done within 14 to 45 days.
Several things people assume affect their score do not actually impact it in Canada:
In Canada, negative items remain on your credit report for specific periods:
The speed of score improvement depends on what is dragging it down. High utilization can be improved in one to two months by paying down balances. Late payment history takes longer — while the marks do not disappear for six years, their negative weight decreases over time as your positive history grows. Bankruptcies and proposals take years to fully overcome but do not prevent you from rebuilding a functional score over a 3 to 5 year period.
Consistently doing the right things — paying on time, keeping utilization low, avoiding unnecessary new applications — produces steady score growth over 12 to 24 months for most Canadians starting from a damaged position.
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