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Published February 14, 2024
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FICO Score in Canada: How It Works

Canada's credit reporting agencies use FICO scoring models to help assess your financial health.

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Credit scores play a pivotal role in determining your eligibility for numerous financial products, such as loans, credit cards and mortgages. 

In Canada, the country’s two credit bureaus, Equifax and TransUnion, use complex algorithms to calculate your 3-digit score. While they each have their own proprietary models, both agencies also rely heavily scoring model companies, like FICO and VantageScore, to calculate Canadian scores. 

So while FICO does not act as a credit reporting agency in Canada, it does provide credit scoring models to Equifax and TransUnion.

What is a FICO score?

A FICO Score, sometimes referred to as a beacon score, is a three-digit number generated based on FICO’s proprietary scoring methodology. A FICO score is a 3-digit number that ranges from 300 up to 900 and is derived from five main factors: your payment history, credit utilization, account history, public records (or credit mix) and credit inquiries.

The acronym FICO stands for the Fair Isaac Corporation, the American analytics company that developed the scoring system, which was first introduced in 1989. 

Nerdy Tip: FICO does not act as a credit reporting agency in Canada: it does not collect information about your personal credit accounts. Rather it provides scoring models to Equifax and TransUnion that the agencies then use in conjunction with their own algorithms to arrive at scores for use by lenders and consumers.

FICO credit score ranges

A semi-circle divided into five equal sections, each representing a TransUnion credit score range and rating, from poor to excellent.

FICO score categories and what they mean 

Although they can vary by bureau or credit scoring company, understanding credit score ranges is crucial for assessing your financial health. Once you know where you stand, you’ll have a clearer picture of how much work is required to improve your creditworthiness and achieve your financial goals.

Here’s a breakdown of different FICO score ranges and their implications:

  • Poor (579 and below): In this range you’re likely to be perceived as a credit risk. You may have challenges obtaining loans or credit cards. 
  • Fair (580 to 669): At this range some lenders may see you as not creditworthy. Those on the low end may have to search out a lender that specializes in people with poor or bad credit. Either way, you will have less favorable terms and potentially higher interest rates.
  • Good (670 to 739): Considered a solid credit range, Canadians in this category are likely to qualify for many loans and credit cards.
  • Very Good (740 to 799): This range indicates a strong credit profile, and you’ll be seen as low risk, resulting in better loan terms, lower interest rates and higher credit limits.
  • Exceptional (800 and above): If you fall in this range, you’ll be approved for a large range of loans and credit cards and enjoy the best terms and rates available.

FICO scoring models in Canada

FICO has developed various scoring models over the years, some of which are used by different lenders in the U.S. versus Canada. 

Some models, like FICO 5, are used primarily in the mortgage and car loan industry. FICO 8, which was introduced in 2009, is used mainly by credit card providers.

FICO 10, launched in 2022[1], is the most recent credit scoring model available and it’s also used in Canada by TransUnion and Equifax. According to FICO Canada, this latest scoring model iteration has improved predictive power for better credit risk assessment compared to prior FICO scores. 

How to Access Your FICO Score in Canada

FICO Score Open Access is a program that lets lenders in Canada give consumers access to their FICO Scores for free so that they can better understand their credit ranking and make more informed financial decisions. These lenders may include banks, credit unions and other financial institutions. Contact your lender to see if they participate in the program.

If your financial institution does not participate in the FICO Score Open Access program, there are other ways to access your credit score directly from the bureaus. 

All Canadians can access their Equifax credit score for free, via online request or mail. TransUnion credit scores can only be accessed for free by residents of Quebec. Both bureaus offer paid subscription options as well.

Additionally, some banks offer free credit scores as part of your online banking services.

Credit scores from other providers

Unlike Equifax and TransUnion, FICO does not directly manage credit scores in Canada. Rather FICO provides scoring models to Equifax and TransUnion which then incorporate FICO models into their own algorithms to calculate Canadian credit scores. 

However, there are companies like Borrowell and ClearScore that leverage credit score data from Canada’s credit agencies to provide consumer services. 

When you sign up for an account with these companies, you get access to your credit score and report (Borrowell provides your Equifax score and report, while ClearScore uses TransUnion). This enables you to monitor your credit health more effectively. 

Additionally, these companies may offer you financial products that align with your credit score, which may help you make better financial decisions.

Improving Your FICO Score

Here’s some ways to build or rebuild your credit score.

Credit utilization ratios and their impact on credit scores

Your credit utilization ratio is the percentage of available credit that you’re currently using. It accounts for 30% of your credit score, coming second only to payment history. A lower credit utilization ratio means you’re using less of your available credit, which signals to lenders that you’re managing your credit wisely. Generally, keeping your credit utilization ratio below 30% is advisable to maintain a healthy credit score. 

Healthy financial habits that help your credit score

Healthy financial habits play a crucial role in cultivating a strong credit score. Here are some key habits that can help:

  1. Paying bills on time. Accounting for 35% of your score, the best way to maintain a high score is to always pay your balances in full and on time. 
  2. Keeping credit balances low. Maintaining low credit card balances relative to credit limits will help maintain a credit utilization below 30%.
  3. Monitoring credit reports. Monitoring credit reports for errors, inaccuracies or signs of fraud ensures you catch mistakes before they can majorly affect your score.
  4. Diversifying credit. Having a mix of credit types, such as revolving and installment accounts, can raise your score. 
  5. Minimizing credit inquiries. Applying for too many credit products at once can decrease your score. 

Article Sources

Works Cited
  1. FICO Canada, “FICO Introduces FICO Score 10 in Canada,” accessed February 29, 2024.


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