Guide to Credit Score Ranges in Canada
Credit score ranges in Canada vary based on the company providing the score, but in general, they’re described as: Poor, Fair, Good, Very Good and Excellent.
Knowing where you fall on the credit score spectrum can help you feel more prepared when you apply for credit, such as a loan, credit card or even an apartment lease.
Credit score ranges in Canada
Here are examples of how certain credit scores are rated by FICO, a credit scoring company and Equifax, one of Canada’s two credit bureaus. You can use these ranges as a quick guide, but keep in mind lenders may use different score versions, or add their own requirements.
FICO | Equifax | |
|---|---|---|
Poor | 300-579 | 300-559 |
Fair | 580-669 | 560-659 |
Good | 670-739 | 660-724 |
Very Good | 740-799 | 725-759 |
Excellent | 800-900 | 760 and up |
Key takeaway: Scores in the Good range or higher usually mean you have an easier time qualifying for credit at better rates. Scores in the Fair or Poor range may still qualify, but you’ll face higher interest rates or need a co-signer.
What is a credit score?
A credit score is a three-digit number that ranges from 300 up to 900.
The higher your credit score, the more likely you’ll be seen as a low-risk borrower and the more willing creditors will be to lend you money (like a loan or a credit card).
How a credit score is different from a credit report
A credit score and a credit report are important pieces of your financial health, but they’re not the same thing.
A credit report is a detailed record of your credit history and financial behaviour over the years (ever since you got your first credit card or loan). It shows how you’ve managed credit, including your accounts, payment history and any missed payments.
Your credit score is a three-digit number that summarizes your credit report. It turns the information in your report into a single score that helps lenders assess your credit risk.
Who determines credit scores in Canada?
Canada has two credit bureaus: Equifax and TransUnion. These agencies create credit scores using scoring models from third-party companies, like FICO and VantageScore, and sometimes their own scoring models. So, you can have more than one credit score at a given time.
Equifax may use a predictive scoring model called Equifax Risk Score 2.0 and TransUnion may use CreditVision risk scores.
These complex algorithms rely on information like your payment history and credit utilization to calculate a simplified credit score.
Furthermore, lenders may have their own thresholds for good credit, and use those ranges to decide whether to approve or deny applications for credit.
How to find your credit score
There are a variety of paid and free ways to check your credit score. You can get it through a credit bureau, a credit monitoring website, or sometimes your bank’s online banking portal. You may also be able to request this information by mail, phone or in-person.
Free options to find your credit score
By law, Equifax and TransUnion must offer consumers free copies of their credit report, which TransUnion calls a Consumer Disclosure.
TransUnion only provides free credit scores to residents of Quebec, while Equifax provides all Canadians with both a credit score and credit report free of charge. Some financial companies, like Credit Karma, Borrowell and ClearScore, also offer free credit scores and reports when you sign up online. Be aware that these websites may send you credit card and loan offers based on your profile.
Many banks, like RBC and Scotiabank provide a credit score (usually just the score, not a full report) for free to online banking customers.
Paid options to find your credit score
If you want to get your TransUnion credit score directly from the agency, you can sign up for a paid credit report and credit score package. For a monthly fee of $24.95, you’ll get access to updated copies score and credit report, fraud alerts and identity theft insurance.
Major factors that influence your credit score
Each credit bureau may weigh aspects of your finances differently, but most models consider five main factors that collectively go into creating your credit score.
Payment History: It forms about 35% of your score. Making payments on time and in full helps your score. Late and missed payments can cause a significant drop.
Credit Utilization: This is the amount of credit you are using versus how much you have available. The lower your ratio, the better — generally, aiming under 30%.
Length of Credit History: A longer credit history provides a longer track record of your finances. It shows the lender how responsibly you've handled credit through various life stages and economic cycles.
Credit inquiries: Applying for new credit accounts can activate a hard pull on your credit report, which could cause a temporary decrease in your score.
Types of Credit: When you have a mix of credit types on your report, such as credit cards, installment loans and mortgages, it may help lenders determine how you handle different credit types.
Note that negative public records, such as bankruptcy or consumer proposals can have a major impact on your score and stay on your file for several years. Lenders may also be reluctant to extend a credit or choose only to do so at a high rate of interest.
Other financial factors that may affect your credit score
Additional factors — like income and job stability — don’t directly impact your credit score. But they can influence your score indirectly if they change your ability to pay bills.
For example, if you lose your job and start missing payments on your credit cards, your credit score could drop.
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