Bremo › Credit Cards › Credit Score
Updated: March 2026 | Reviewed by the Bremo editorial team
Your credit score in Canada is calculated from your credit report data by Equifax and TransUnion. Credit cards are one of the most powerful tools for building — or destroying — your credit score. Understanding exactly how they impact each factor gives you precise control over your score.
On-time vs. late payments. The single biggest factor. One missed payment can drop your score significantly.
How much of your available credit you're using. Keep it below 30% for best results.
How long your accounts have been open. Older accounts help — avoid closing old cards.
Having different types of credit (cards, loans, mortgage) shows you can manage varied obligations.
Hard inquiries from credit applications. Each application temporarily reduces your score by a few points.
Every on-time credit card payment is reported to Equifax and TransUnion and counted positively in your payment history. Even a no-fee card used for one small purchase per month and paid in full builds a strong payment history track record over time.
Best practice: Set up automatic full-balance payment so you never accidentally miss a due date.
Credit utilization is calculated as: (total balances ÷ total credit limits) × 100. Using $500 on a $2,000 limit card = 25% utilization — within the recommended below-30% range.
| Utilization | Impact on Score | Example ($2,000 limit) |
|---|---|---|
| 0–10% | Excellent | Balance under $200 |
| 10–30% | Good | Balance $200–$600 |
| 30–50% | Neutral to negative | Balance $600–$1,000 |
| 50–75% | Negative | Balance $1,000–$1,500 |
| 75%+ | Significantly negative | Balance over $1,500 |
Your oldest account age and average account age both matter. A credit card you've held for 10 years contributes significantly to this factor. This is why you should avoid closing old credit cards — even ones you rarely use.
A single payment that's 30+ days late can drop your score by 50–100 points. Payments reported as 60 or 90 days late cause even more damage. Collections notices (typically after 90–120 days) are among the most damaging items on a credit report, remaining for 6–7 years.
Maxing out your credit cards — even if you pay them in full monthly — can temporarily hurt your score if the bureau captures your balance before you pay. Try to pay down large purchases before your statement closing date if you're concerned about a score check.
Each credit card application generates a "hard inquiry" that reduces your score by 3–10 points. Multiple hard inquiries in a short window signal financial stress to lenders. Space out applications by at least 6 months.
Closing a credit card reduces your total available credit (increasing utilization) and can shorten your average account age — both negative impacts. If you want to stop using a card, simply lock it in a drawer rather than closing it.
| Score Range | Rating | Typical Impact |
|---|---|---|
| 760–900 | Excellent | Best rates on mortgages, loans, and cards |
| 725–759 | Very Good | Competitive rates, easy approval |
| 660–724 | Good | Approved for most products |
| 560–659 | Fair | Limited options, higher rates |
| 300–559 | Poor | Secured products only |
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Get KOHO Free — Use Code 45ET55JSYACredit cards are the most accessible credit-building tool for most Canadians. Used correctly — paid in full monthly, kept under 30% utilization, never closed — they build an excellent credit score that unlocks the best mortgage rates, loan approvals, and card offers throughout your financial life.