10 Must-Know Credit Score Facts
Your credit score plays a major role in your financial life, affecting everything from loan approvals to interest rates and even rental applications. Despite its importance, many people don’t fully understand how their credit score works. Here are 10 key facts you need to know about credit scores in Canada.
1. Two Credit Bureaus, Two Scores
Canada has two credit-reporting agencies: Equifax and TransUnion. Your credit score may vary between the two, as different lenders report to different bureaus.
2. You Can Check Your Credit Report for Free
Your credit score is based on the information in your credit report. You can request a free copy of your credit report once a year from Equifax and TransUnion to review your financial history. Many banks and financial services also provide free credit score access.
3. Credit Scores Range from 300 to 900
The average Canadian credit score is 650. The higher your score, the better your chances of approval for loans and lower interest rates.
4. Credit Scores Are Used Beyond Loans
Lenders aren’t the only ones checking your credit score. Landlords, insurance companies, employers, and mobile phone providers may also review it before making decisions.
5. Five Key Factors Affect Your Credit Score
Your credit score is based on:
- Payment history (late or missed payments hurt your score)
- Credit utilization (using less than 35% of your available credit is ideal)
- Length of credit history (longer credit history helps)
- Types of credit (a mix of loans and credit cards is beneficial)
- Credit inquiries (applying for too many new credit accounts can lower your score)
6. Errors Happen—Check Your Report Regularly
Mistakes or outdated information can negatively impact your score. Review your credit report and dispute any errors with Equifax or TransUnion.
7. A Score of 700+ is Considered “Good”
A credit score above 700 increases your chances of loan approvals, better credit limits, and lower interest rates on mortgages, auto loans, and credit cards.
8. Credit Scores Change Constantly
Your score updates regularly based on new financial activity. If you’ve made mistakes in the past, you can rebuild your score over time with responsible credit use.
9. Checking Your Own Score Won’t Hurt It
Checking your credit score through a bank or credit bureau is a “soft inquiry” and does not lower your score. However, frequent applications for new credit (hard inquiries) can have a negative effect.
10. How to Improve Your Credit Score
- Pay bills on time
- Pay off balances in full whenever possible
- Keep your credit utilization below 35%
- Maintain a mix of credit types (credit cards, installment loans)
- Apply for new credit sparingly
Final Thoughts
Your credit score is more than just a number—it’s a key part of your financial health. Even if you’re not planning to borrow money soon, maintaining a good credit score can save you money and open up more opportunities in the future.
If you need help understanding your credit score or want to improve your financial situation, reach out to me today!
Inspired by DLC Marketing Team