Your credit score is a number lenders use to guess how likely you are to pay back what you borrow. In Canada it runs from 300 to 900. The higher it is, the easier it is to get approved and the better the terms you’re offered.
The score ranges
Canada has 2 main credit bureaus, Equifax and TransUnion. Here’s how Equifax groups its scores.
| Score | Equifax calls it |
|---|---|
| 760 to 900 | Excellent |
| 725 to 759 | Very good |
| 660 to 724 | Good |
| 560 to 659 | Fair |
| 300 to 559 | Poor |
Other scores use their own formulas and scales, so the same number can mean something different from one company to the next. That’s why your score can look different in your bank app, a free score site and a lender’s check.
What lenders look for
Equifax says lenders generally see a score of 660 or higher as acceptable, lower risk borrowing. Below 660 you may still get approved, but you’re less likely to get the best rates or terms.
Your score is only part of the picture. A lender can also look at your income and at specific parts of your credit report, like recent missed payments, before it says yes.
What moves your score
- Paying on time. Your payment history counts the most. If you can’t pay the full balance, pay at least the minimum by the due date. Not sure which number to pay? See statement balance vs current balance.
- Using less of your limit. Try to keep your balances under 30% of your total credit limit, even if you pay in full each month.
- Keeping old accounts open. Closing your oldest card shortens your history and cuts your available credit. A no annual fee card costs nothing to keep.
- Applying only when you need to. Each application adds a credit check to your report. Shopping for a car loan or mortgage within 2 weeks counts as one check.
- Borrowing only what you can pay back. A mix of a card, a loan and a line of credit can help a little. Too much debt hurts.
How much of your limit you’re using
- Card A limit
- $3,000.00
- Card B limit
- $2,000.00
- Total limit
- $5,000.00
- Balances on your statements
- $1,200.00
- Share of your limit used
- 24%
$1,200 divided by $5,000. Under 30% is the guideline from the Financial Consumer Agency of Canada.
Mr. Loonie’s tip In a month when you spend a lot, pay part of your card before the statement date. A smaller balance shows up on your statement, so you use less of your limit.
How long things stay on your report
| What happened | Equifax | TransUnion |
|---|---|---|
| Late or unpaid card and loan payments | Up to 6 years | Up to 6 years |
| A lender checks your credit | 3 years | 6 years |
| First bankruptcy | 6 years after discharge | 6 years after discharge, 7 in N.L., Ont., P.E.I. and Que. |
| Consumer proposal | 3 years after it’s paid off, or 6 years after you sign, whichever is first | 3 years after it’s paid off, or 6 years after you sign, whichever is first |
Check your score for free
You can see your credit report from both bureaus for free online, updated monthly, or ask for a copy by mail or phone.
- Equifax: free credit score in every province and territory.
- TransUnion: free credit score if you live in Quebec or Ontario, as part of your consumer disclosure.
- Your bank: some bank and card apps show a free score too.
Check your report once or twice a year for accounts you don’t recognize. A mistake or a stranger’s account can drag your score down.