Glossary
Credit Score
A credit score is a number, typically from 300 to 900 in Canada, that summarizes your credit history for lenders considering your application..
A credit score is a number, typically between 300 and 900 in Canada, that summarizes your credit history for lenders. It is calculated from the information in your credit report, which is compiled by consumer reporting agencies such as Equifax Canada and TransUnion Canada. The score is a snapshot rather than a permanent record: it shifts as your borrowing and repayment behaviour changes.
How Canadian lenders use your credit score
When you apply for a mortgage, the lender pulls your credit report and score as part of mortgage underwriting. A stronger score generally supports a stronger application and can open up more lender options and pricing; a weaker one may narrow your choices or point you toward lenders that work with bruised credit.
Your score is not the only test. Federally regulated lenders also measure affordability through the GDS and TDS ratios, apply the federal mortgage stress test, and follow OSFI Guideline B-20 for residential underwriting. If your down payment is below 20 per cent, the mortgage must be insured, and the insurer reviews the file as well.
What shapes a score
- Payment history — late or missed payments weigh heavily.
- Credit utilization — how much of your available revolving credit you actually use.
- Length of history — older, well-managed accounts generally help.
- Mix and inquiries — a blend of account types, plus how often you apply for new credit.
Scores are not identical at the two agencies, because each uses its own model and the underlying files can differ.
Why it matters at application time
A score sits behind very practical steps: a mortgage pre-approval, the rate a lender is willing to offer, and whether a file needs a co-signer or guarantor to move forward. Reviewing your report before you shop, correcting errors, and keeping balances low are common preparation steps. A low score does not automatically end a mortgage application, but it usually means more conditions, fewer lenders, or a different product mix.
Frequently asked questions
What is considered a good credit score in Canada?
There is no single official cutoff, and lenders set their own expectations. In general, higher is better: files in the upper part of the 300-to-900 scale tend to see the widest lender choice and pricing, while lower scores may mean fewer options or added conditions. Ask each lender what it looks for.
Does checking my own credit score lower it?
No. Checking your own score or report is a soft inquiry and does not affect your score. Hard inquiries occur when a lender pulls your file for an application, and a cluster of those in a short period can have a small effect. Ordering your report directly from Equifax or TransUnion is routine.
How long does negative information stay on my credit report?
It varies by item and by province, and each reporting agency handles retention differently. Rather than rely on a fixed number, get your report, confirm what is listed, and dispute anything inaccurate. Confirm current retention rules with the agency or the Financial Consumer Agency of Canada.
Sources
Related terms
- Mortgage Pre-Approval — A mortgage pre-approval is a lender's conditional commitment to lend a set amount at a held rate, subject to verifying your income, debts and the property.
- Mortgage Stress Test — The federal mortgage stress test is a qualification rule that makes lenders check whether you could afford your mortgage if rates were higher than your contract rate.
- Gross Debt Service Ratio (GDS) — The share of gross household income that goes to housing costs — mortgage principal and interest, property taxes, heating, and half of condo fees — commonly capped at 39%.
- Mortgage Default Insurance — Insurance that protects the lender, not the borrower, when a high-ratio mortgage goes into default and the home sale does not repay the debt.
- Mortgage Underwriting — The lender's review of your income, credit, down payment, and the property's value before it approves or declines your mortgage.