Skip to main content

Credit Score Guide Canada 2026 | How Credit Scores Work, Ranges & How to Improve

Updated

Your credit score is a three-digit number between 300 and 900 that determines what you can borrow, at what interest rate, and sometimes whether you can rent an apartment or get a job. In Canada, credit scores are calculated by two bureaus — Equifax and TransUnion — and every lender uses them to assess your creditworthiness.

This guide covers how credit scores work in Canada, what affects them, how to check yours for free, and actionable steps to improve a low score.

Credit Score Ranges in Canada

Range Rating What It Means
800–900 Excellent Best rates on everything; automatic approvals
760–799 Very good Premium rates; easy approvals
725–759 Good Competitive rates; most products available
660–724 Fair Standard rates; some limitations
560–659 Below average Higher rates; limited options; may need secured products
300–559 Poor Difficulty getting approved; subprime rates only

Most Canadians have scores between 650 and 750. The average credit score in Canada is approximately 680.

Full breakdown: Credit Score Ranges Canada

How Credit Scores Are Calculated

Both Equifax and TransUnion use similar factors, roughly weighted as:

Factor Weight What It Measures
Payment history ~35% Whether you pay bills on time
Credit utilization ~30% How much of your available credit you use
Credit history length ~15% How long your accounts have been open
Credit mix ~10% Variety of credit types (cards, loans, mortgage)
New credit inquiries ~10% How often you apply for new credit

Payment History (35%)

The single most important factor. Even one late payment (30+ days) can drop your score 50–100+ points. Set up automatic minimum payments on every credit account to never miss a due date.

Credit Utilization (30%)

This is the percentage of your available credit that you’re using. Keep it under 30% — ideally under 10%.

Available Credit Balance Utilization Impact
$10,000 $500 5% Excellent
$10,000 $2,000 20% Good
$10,000 $3,000 30% Acceptable
$10,000 $7,000 70% Damaging

Utilization is calculated per card and across all cards. High utilization on even one card hurts.

Credit History Length (15%)

Older accounts help your score. This is why you should keep your oldest credit card open even if you rarely use it.

Related: Does Closing a Credit Card Hurt Your Credit Score?

Credit Mix (10%)

Having different types of credit — a credit card, a car loan, a line of credit — shows lenders you can manage various obligations. Don’t take on debt just for the mix, but know that having only credit cards limits your score ceiling slightly.

New Credit Inquiries (10%)

Each hard inquiry (loan application) can temporarily reduce your score by 5–10 points. Multiple inquiries for the same type of credit within 14–45 days are usually grouped as one inquiry (rate shopping).

How to Check Your Credit Score for Free

Service Bureau Cost Score Type
Borrowell Equifax Free Equifax Risk Score
Credit Karma TransUnion Free TransUnion CreditVision
Your bank (RBC, TD, BMO, etc.) Varies Free Varies
Equifax direct Equifax Free (report) / $19.99 (score) Equifax
TransUnion direct TransUnion Free (report) / $19.99 (score) TransUnion

Full guide: How to Check Your Credit Score for Free in Canada

Credit Score vs Credit Report

Your credit score is the number. Your credit report is the full document showing your credit history — every account, payment, inquiry, and public record.

You should check your credit report at least once per year to catch errors.

How to Improve Your Credit Score

Quick Wins (1–3 Months)

Action Impact How
Pay down credit card balances High Get utilization under 30% (ideally under 10%)
Set up automatic payments High Never miss a payment
Dispute errors on your report Medium–High Remove incorrect late payments or collections
Become an authorized user Medium Get added to a family member’s old, good-standing card
Request a credit limit increase Medium Lowers your utilization ratio (don’t spend more)

Long-Term Strategies (3–12 Months)

Action Impact How
Keep old accounts open Medium Length of history matters
Mix credit types Low–Medium Add an installment loan if you only have cards
Limit new applications Low–Medium Apply only when needed
Use a secured credit card Medium For thin or damaged credit files

Full strategy guide: How to Improve Your Credit Score Fast in Canada

What Hurts Your Credit Score

Action Score Impact How Long It Affects You
Late payment (30+ days) -50 to -100+ points 6 years
Collection account -80 to -150 points 6 years
Consumer proposal Severe 3 years after completion
Bankruptcy Severe 6–7 years
Maxing out a credit card -20 to -50 points Until balance is reduced
Hard inquiry -5 to -10 points 2 years (impact fades after 6 months)
Closing oldest card -10 to -30 points Gradual

Full breakdown: What Hurts Your Credit Score in Canada

Why Did My Credit Score Drop?

Common reasons for unexpected drops:

Credit Score Requirements by Product

Product Minimum Score Ideal Score
Mortgage (A-lender) 680 720+
Mortgage (B-lender) 550–600 —
Car loan (prime) 650 700+
Credit card (standard) 650 680+
Credit card (premium) 700 750+
Line of credit 650 700+
Rental application Varies 650+

Building Credit from Scratch

If you’re new to Canada or have never had credit:

  1. Get a secured credit card (requires a deposit, easy approval)
  2. Use it for small purchases each month
  3. Pay the full balance on time every month
  4. After 6 months, apply for a regular credit card
  5. After 12 months, your score should be 650+

All Credit Score Articles