Your credit score affects more than just loan approvals. It can influence the interest rate on a car loan or mortgage, whether you need a deposit for a cell phone plan, and sometimes even rental applications. In Canada, scores typically range from 300 to 900, with higher being better.
What actually affects your score
- Payment history (about 35%): Paying at least the minimum, on time, every time, is the single biggest factor.
- Credit utilization (about 30%): How much of your available credit you're using. Staying under about 30% of your limit is a common guideline. For example, on a $5,000 limit, that means keeping your balance below $1,500.
- Length of credit history: Longer histories generally help, which is one reason to think twice before closing your oldest credit card.
- Credit mix: A mix of credit types (credit card, car loan, line of credit) can help, though it's a smaller factor.
- New credit inquiries: Applying for several new credit products in a short period can temporarily lower your score.
Two credit bureaus, two scores
Canada has two main credit bureaus, Equifax and TransUnion, and your score can differ slightly between them depending on what each has on file. Checking your own score through a bureau or a bank app is a "soft check" and does not hurt your credit. A lender reviewing your file for a new loan is a "hard check," which can lower your score slightly for a short time.
Simple habits that build credit over time
- Set up autopay for at least the minimum payment on every credit account
- Keep balances well below your credit limit, even if you pay in full monthly
- Avoid applying for multiple new credit products in a short window
- Check your credit report from both bureaus at least once a year for errors or signs of fraud
If your score has taken a hit
Scores can recover. Consistent on-time payments and lower utilization tend to show improvement within a few months, though building strong history takes longer. There's rarely a shortcut, but there's almost always a path back. If balances are the problem, start with a practical plan for paying down debt.
Frequently asked questions
What is a good credit score in Canada?
Canadian credit scores range from 300 to 900. Scores in the high 600s and above are generally considered good, and scores above roughly 760 are often considered excellent, though each lender sets its own criteria.
Does checking my own credit score lower it?
No. Checking your own credit score or report is a soft inquiry and has no effect on your score. Only hard inquiries, made when a lender reviews your file for a credit application, can lower it temporarily.
How can I improve my credit score quickly?
The fastest levers are paying every bill on time and lowering your credit utilization by paying down balances, ideally below 30% of your limits. Improvements often appear within a few months, while a long, strong history takes years to build.