What affects my credit score?

Credit bureaus consider many factors and use a mathematical formula to figure out your credit score.

This formula determines how well you manage credit and takes into account various components described in your credit report, such as:

  • Your payment history - Do you carry over a balance on your credit card from month to month? Have you ever missed a payment on any of your debts?
  • Any collection or bankruptcy recorded against you - Has a collection agency had to collect an unpaid bill from you? Have you ever been bankrupt?
  • Your outstanding debts - What is the limit on your credit card? Is your spending close to your credit limit?
  • Your account history - How long have you had credit?
  • The number of recent inquiries made about your credit report - How many times has someone asked about your credit report?
  • The type of credit you are using - Do you only have credit cards, or do you have a mix of credit cards and loans?

These factors do not all have the same weight in determining your credit score. The most important factors are your payment history, whether you have ever declared bankruptcy, and the amount of your outstanding credit balances. 
Although other elements, such as your mortgage information and any personal inquiries you have made, may also be included in your credit report, they usually do not influence your credit score.

Credit Score

Credit scores range from 300 to 900 and each range means the following:
  • 780 to 900 is considered excellent, and you will easily get loans and credit at preferred interest rates.
  • 700 to 780 is considered a strong score, and you will not have trouble getting approved with a good interest rate
  • 625 and lower is considered poor, and you will have more difficulty qualifying for a loan. If you do qualify, interest rates will be a lot higher

What do I do if there is an error in my credit report?

Contact the credit-reporting agency and your financial institution immediately. You can also contact the Financial Consumer Agency of Canada for more information and help.

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Last updated: March 26, 2024 4001370