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Understanding what constitutes a good credit score in Canada is essential for managing your financial health.

A good credit score can impact your ability to secure loans, obtain favorable interest rates, and even affect rental and job applications.

This comprehensive guide will delve into the intricacies of credit scores in Canada, explaining what is considered a good score, how it is calculated, and tips to improve it.


What is a Credit Score?

A credit score is a numerical representation of your creditworthiness, ranging from 300 to 900 in Canada.

It is used by lenders, landlords, and employers to assess your financial responsibility. The higher your credit score, the more likely you are to be considered a low-risk borrower.

Two major credit bureaus, Equifax and TransUnion, are responsible for calculating and reporting credit scores in Canada.


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Credit Score Ranges

Credit scores in Canada are categorized into several ranges, each indicating a different level of creditworthiness:

  • Poor (300-559): Individuals with a credit score in this range are considered high-risk borrowers and may struggle to get approved for credit.
  • Fair (560-659): A fair credit score indicates a moderate risk. Borrowers may get approved for credit but with higher interest rates.
  • Good (660-724): A good credit score suggests a lower risk and typically results in better loan terms and interest rates.
  • Very Good (725-759): Those in this range are seen as reliable borrowers and receive even more favorable terms.
  • Excellent (760-900): An excellent credit score signifies minimal risk, allowing borrowers to access the best financial products and lowest interest rates.

What is Considered a Good Credit Score?

In Canada, a good credit score is generally considered to be between 660 and 724.

This range indicates that you have a history of managing your credit responsibly and are a relatively low-risk borrower.

With a good credit score, you can expect to qualify for most credit products, including loans, credit cards, and mortgages, often with favorable terms and interest rates.

How Credit Scores Are Calculated

Credit scores are calculated based on several factors:

  • Payment History (35%): Your track record of making on-time payments is the most significant factor. Late payments, defaults, and bankruptcies negatively impact your score.
  • Credit Utilization (30%): This refers to the ratio of your credit card balances to your credit limits. Keeping your utilization below 30% is recommended.
  • Length of Credit History (15%): A longer credit history generally boosts your score, as it provides more data on your borrowing habits.
  • New Credit Inquiries (10%): Frequent applications for new credit can lower your score, as it may suggest financial instability.
  • Credit Mix (10%): A diverse range of credit accounts, such as credit cards, mortgages, and installment loans, can positively impact your score.

How to Check Your Credit Score

You can check your credit score in Canada through various means:

  • Credit Bureaus: Equifax and TransUnion offer paid services to access your credit score and report. They also provide free access once a year.
  • Financial Institutions: Some banks and credit card companies offer free credit score monitoring as part of their services.
  • Online Services: Websites like Borrowell and Credit Karma provide free access to your credit score and report.

Why a Good Credit Score Matters

A good credit score is crucial for several reasons:

  • Loan Approvals: Lenders are more likely to approve your loan applications if you have a good credit score.
  • Interest Rates: Higher credit scores typically lead to lower interest rates on loans and credit cards, saving you money over time.
  • Rental Applications: Landlords often check credit scores to ensure potential tenants can meet rental obligations.
  • Employment Opportunities: Some employers check credit scores as part of their hiring process, particularly for positions requiring financial responsibility.

Credit Score Canada: What is a Good Credit Score in Canada and How to Calculate?

Tips to Improve Your Credit Score

Improving your credit score requires consistent and responsible credit management:

  • Pay Bills on Time: Ensure all your bills are paid by the due date to maintain a positive payment history.
  • Reduce Credit Utilization: Aim to keep your credit card balances below 30% of your total credit limit.
  • Limit New Credit Applications: Avoid applying for new credit unless necessary, as each inquiry can temporarily lower your score.
  • Diversify Credit Types: Having a mix of credit accounts can positively impact your score.
  • Monitor Your Credit Report: Regularly check your credit report for errors or fraudulent activities and dispute any inaccuracies.

Common Credit Score Myths

There are several misconceptions about credit scores that can lead to confusion:

  1. Checking Your Own Score Lowers It: Checking your own credit score is considered a soft inquiry and does not affect your score.
  2. Closing Old Accounts Improves Your Score: Closing old credit accounts can actually shorten your credit history and negatively impact your score.
  3. Using Only Cash Helps Your Score: Building a credit history requires using credit responsibly; using only cash provides no data for credit bureaus to evaluate.


A good credit score in Canada is a valuable asset that can open doors to better financial opportunities and lower borrowing costs.

Understanding what constitutes a good credit score, how it is calculated, and how to improve it can help you manage your finances more effectively.

By maintaining responsible credit habits, regularly monitoring your credit report, and being aware of common myths, you can build and sustain a strong credit profile that serves you well in various aspects of life.

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