Understanding your credit score
The first number your lender looks at — and how to improve it before you shop for a mortgage.
Before you even visit a property, your credit score is one of the first things mortgage lenders in Canada review. It is your financial passport — a number between 300 and 900 that summarizes your repayment history.
A difference of 50 points can save you thousands of dollars in interest over the life of your loan, or change which lenders will approve you.
The credit score range in Canada
What affects your credit score
Payment history — 35%
This is the most important factor. A single payment that is 30 days late can stay on your file for up to six years and drop your score by 50 to 100 points.
Utilization — 30%
Aim to stay under 35% of your limit. If your card limit is $5,000, keep your balance under $1,750.
Length of credit history — 15%
Do not close old cards even if you no longer use them. Account age helps your score.
Recent inquiries — 10%
Avoid multiple credit applications before you apply for a mortgage. Each hard inquiry can lower your score slightly.
Check your credit report for free
Two Canadian tools let you see your Equifax score at no cost without hurting your score (soft inquiry).
Borrowell
FreeBorrowell is a Canadian company that gives you access to your Equifax score every week, free of charge. You also get financial product recommendations tailored to your profile.
- check_circleEquifax score updated weekly
- check_circleFull report available
- check_circleDoes not hurt your score (soft inquiry)
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Credit Karma
FreeCredit Karma (now available in Canada) shows your TransUnion score for free. It is especially useful for comparing both scores, since Equifax and TransUnion can differ.
- check_circleFree TransUnion score
- check_circleTrack changes over time
- check_circleAlerts when something changes
- check_circleSimple, clear interface
Tip: Use both tools. Borrowell shows your Equifax score; Credit Karma shows your TransUnion score. Mortgage lenders may pull one or both — knowing both gives you the full picture.
How to improve your score — practically
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Automate your paymentsSet up at least the minimum payment on all cards and loans. One missed payment can stay on your file for six years.
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Keep cards openEven if you do not use them, keeping older cards open helps utilization and the average age of your accounts.
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Aim under 35% utilizationIf you can, aim for under 10% before you apply for a mortgage. It can make a meaningful difference to your score.
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Check your reports for errorsA mistake on your Equifax or TransUnion file can unfairly hurt your score. Review annually and dispute inaccurate information directly with the bureau.
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Avoid new credit applicationsIn the 6 to 12 months before your mortgage application, avoid other credit applications (new cards, car loans). Each hard inquiry can lower your score slightly.
Questions about your credit score?
We can help you understand your report and prioritize what to fix before you apply for a mortgage.
Contact us →