Credit Score

The Canadian scale: 300 to 900

Canada's credit scores run from 300 to 900, not the 300 to 850 scale used in the United States, so American articles and rules of thumb do not transfer cleanly. Two private companies, Equifax and TransUnion, each keep a credit file on you and each produce their own score.

The two scores are almost never identical for the same person, and that is normal. Not every lender reports to both bureaus, the files can update on different days, and the scoring formulas differ. A 20 or 30 point gap between your Equifax and TransUnion scores means nothing is wrong.

What the numbers roughly mean

There is no official government scale: every lender sets its own cutoffs, and a score that one bank calls "good" another may price differently. That said, the bands below are a reasonable map of how Canadian lenders read scores.

The 660 to 724 band is roughly where mainstream prime lending gets comfortable, including most bank mortgages. Below that, expect more questions, co-signer requests or higher rates from alternative lenders.

What actually drives your score

The exact formulas are proprietary, but the ingredients and their approximate weights are well established:

• Payment history, about 35%. Paying on time, every time, on everything. A single missed payment reported to a bureau can sting for years; the minimum payment made on time protects your score fully.
• Credit utilization, about 30%. The share of your revolving limits you are using, across credit cards and lines of credit such as a HELOC. Keeping balances under roughly 30% of limits is the guideline, and because utilization has no memory, paying balances down is the fastest lever you have.
• Length of credit history, about 15%. Older accounts help, which is a reason to keep a long-held card open even if you rarely use it.
• New credit and inquiries, about 10%. A burst of applications in a short period reads as risk.
• Credit mix, about 10%. A blend of revolving credit and instalment loans looks marginally better than one card alone. Not worth borrowing just to diversify.

Hard vs. soft inquiries

A hard inquiry happens when a lender pulls your file to decide on an application: a credit card, a car loan, a mortgage. Each one can shave a few points and stays visible for a while. A soft inquiry, such as checking your own score, a pre-approval screen or an employer check, never affects your score.

Rate-shopping for a mortgage is treated sensibly: multiple mortgage-related pulls within a window of roughly 45 days are scored as a single inquiry (as of July 2026), so comparing several lenders or using a broker does not pile up damage. Shop freely, just do it within a compact period.

What does not affect your score

Checking your own score, through a bureau or a bank app, is a soft inquiry and completely harmless, no matter how often you look. Your income is not in your credit file at all: a high salary does not raise your score, and lenders assess income separately through your debt service ratios. Debit cards and prepaid cards never touch your file, because no credit is involved. Rent and utilities historically did not count either, though some reporting services now let landlords or tenants opt in.

And the most stubborn myth in Canadian personal finance: carrying a balance does not help your score. Utilization is measured from the balance your card issuer reports, whether you pay interest on it or not. Pay in full every month; the score outcome is the same or better, and the interest saved is pure profit.

Credit scores and your mortgage

Mortgages are where the score meets real money. For an insured mortgage backed by mortgage default insurance, insurers generally want at least one borrower with a score around 600 or higher (as of July 2026). Above that floor, a stronger score will not change the insurance premium, but it changes the lender's appetite: borrowers in the very good and excellent bands are the ones offered the deepest discounts off posted rates, on both fixed mortgages and variable ones priced against the prime rate.

The score opens the door; it does not size the loan. How much you can borrow is governed by your income, your debts and the stress test, through your debt service ratios.

Rebuilding a bruised score

Scores heal with time and boring behaviour. Automate at least the minimum payment on everything so payment history stops taking hits. Attack utilization: getting balances from 80% of limits down toward 30% often moves a score within a couple of statement cycles. If no one will issue you a card, a secured card, backed by a deposit, rebuilds history with the bureaus. And keep old accounts open while you recover; closing them shortens your history and shrinks your available limits at the worst possible moment. Most negative marks age off Canadian credit reports after roughly six years.