A clear understanding of your credit score Canada is essential for renting, getting a mortgage, qualifying for a credit card or loan, and managing your financial health. This guide explains what a credit score is and how is credit score calculated in Canada, how to check it, and practical steps to improve and protect it.
What is a credit score?
Definition: A credit score is a numeric summary of the information in your credit report that helps lenders assess your credit risk.
Common range: In Canada most credit scoring models use a range roughly between 300 and 900, where higher scores indicate lower risk.
Who uses it: Banks, credit card companies, mortgage lenders, auto lenders and some landlords or utility companies.
Credit bureaus vs. credit scores
Credit bureaus: In Canada two major credit bureaus collect and maintain credit reports — [Equifax Canada] and [TransUnion Canada]. They supply reports and scoring to lenders.
Credit report: A detailed record of credit accounts, balances, payment history, inquiries and public records (collections, bankruptcies).
Credit score: A calculated number derived from that report. Different bureaus and lenders may use different scoring models, so your score can vary between sources.
How is a credit score calculated in Canada?
There is no single universal formula. However, scoring models generally weigh the same core factors. Typical components are:
Payment history (most important)
What it is: On-time vs. late payments, accounts in collections, bankruptcies.
Why it matters: Lenders want to see that you repay on time.
Amounts owed / credit utilization
What it is: How much of your available revolving credit (credit cards, lines of credit) you're using.
Guideline: Lower utilisation (often under 30%) typically helps scores.
Length of credit history
What it is: Age of your oldest account, average age of accounts.
Why it matters: Longer, well-managed histories show stability.
New credit / inquiries
What it is: Recent applications for credit (hard inquiries) and recently opened accounts.
Impact: Multiple recent applications can lower your score.
Credit mix
What it is: Variety of account types — instalment loans (auto, mortgage) and revolving credit (credit cards).
Why it matters: A healthy mix can be favourable, but it's a smaller factor.
Note: Exact weights vary by scoring model. Lenders often use proprietary models that combine bureau data with their own criteria (income, employment, down payment).
Typical credit score ranges (approximate)
300–559: Poor (may be declined or face high interest).
560–659: Fair (limited credit options, higher rates).
660–724: Good (competitive products available).
725–759: Very good.
760–900: Excellent (best interest rates and access).
Reminder: These ranges are illustrative. Different lenders and bureaus may classify scores differently.
How to check your credit score and report in Canada
Get your credit report from the bureaus
Order your consumer disclosure from [Equifax Canada] and [TransUnion Canada].
Use government resources
Read the FCAC guidance on credit reports and how to get them: [Financial Consumer Agency of Canada (FCAC)].
Use free services and calculators
Some banks and credit card providers offer free credit scores or snapshots. Checking your own score is a soft inquiry and won't hurt your credit.
Request corrections
If you spot errors, follow bureau dispute procedures and contact the creditor. Use the bureau pages linked above for dispute steps.
Step-by-step: How to dispute an error
Obtain a copy of your credit report from the bureau showing the error.
Collect supporting documents (statements, letters, proof of payments).
Submit a dispute online or by mail to the bureau with evidence.
Follow up — bureaus usually investigate with the creditor and respond within about 30 days.
Escalate if needed to the creditor or to the bureau's complaint process; contact the [FCAC] for guidance.
Practical steps to improve your credit score (checklist)
Pay bills on time, every time.
Reduce credit card balances — target under 30% utilisation; lower is better.
Avoid opening many new accounts at once.
Keep older accounts open to maintain account age, unless fees justify closure.
Check your reports annually for errors and identity theft.
Use a mix of credit responsibly (a small instalment loan and a card can help).
Deal with collections: pay or negotiate and ensure updates are reflected on your report.
When credit score matters most
Mortgages: Lenders combine scores with income, down payment and amortization. For insured mortgages, mortgage defaults are assessed by insurers and lenders — see [Canada Mortgage and Housing Corporation (CMHC)] for guidance.
Credit cards & loans: Higher scores improve approval odds and interest rates.
Renting or utilities: Landlords and utility companies may check scores or report payment history.
Common misconceptions
Checking your own score hurts it: False — consumer checks are soft inquiries and do not affect scores.
Closing cards always helps: Not necessarily — closing a long-standing card can reduce average account age and increase utilisation.
Only credit cards matter: All credit accounts and public records (collections, bankruptcies) affect scores.
Credit scores are permanent: No — time, payments, and corrections change scores.
Identity protection and fraud
Monitor accounts and credit reports frequently.
Freeze or lock your file with bureaus if available, or place a fraud alert if you suspect identity theft.
Report scams and identity theft to the [Canadian Anti-Fraud Centre].
When to seek professional help
If you're dealing with complex errors, identity theft, multiple collections, or bankruptcy, consider speaking with a licensed consumer proposal trustee, a mortgage broker for lending issues, or a registered credit counsellor registered with recognized provincial bodies.
Quick resources (Canada)
[Equifax Canada] — consumer credit reports and disputes
[TransUnion Canada] — consumer credit reports and disputes
[Financial Consumer Agency of Canada (FCAC)] — guides on credit reports and consumer rights
[Canada Mortgage and Housing Corporation (CMHC)] — mortgage and insured mortgage info
[Canadian Anti-Fraud Centre] — report scams and identity fraud