Build a Perfect Credit Score
From thin file to 850 - the full playbook.
What a credit score actually is
Your credit score is nothing more than a lender's guess at the probability you'll pay back a loan. The math is proprietary, but the inputs are public: payment history (35%), utilization (30%), length (15%), mix (10%), new credit (10%). Master those five and you master the score.
What you'll learn
Canadian scores run 300-900
Equifax and TransUnion are the two bureaus
Your score is a probability - 'how likely you are to repay'
Lenders pull one or both bureau scores when you apply
The Canadian number
~672
Average Canadian credit score
Source: Equifax 2024
Your score is a probability, not a grade
Your Canadian credit score is a three-digit number between 300 and 900. It represents one thing: the statistical likelihood that you will repay borrowed money on time over the next 12-24 months.
Equifax and TransUnion are the only two credit bureaus in Canada. Every lender reports your payment behaviour to one or both of them, and each bureau calculates your score independently.
Your score is not a measure of wealth, income, or financial worth. A student with one well-managed credit card can outscore someone earning $300,000 a year who missed a payment.
Where your score comes from
Five factors feed into your score, each with a fixed weight: payment history (35%), credit utilization (30%), length of credit history (15%), credit mix (10%), and new credit inquiries (10%).
The first two factors alone account for 65% of your score. That means paying on time and keeping balances low relative to your limits will move the needle more than anything else.
You can check your score for free through Borrowell (Equifax) or Credit Karma (TransUnion). These are soft pulls - they do not affect your score.
Score factor weights
- Payment history 35%
- Utilization 30%
- Length 15%
- Mix 10%
- New credit 10%
The 300-900 range and what it means in Canada
Canadian credit scores span from 300 to 900. This range is used by both Equifax and TransUnion, though each bureau may calculate a slightly different number for you because not all lenders report to both.
A score below 560 is considered poor and limits your options significantly. Between 660 and 724 is good - most products are available. Above 760 you are in excellent territory and qualify for the best rates on mortgages, loans, and credit cards.
The average Canadian credit score sits around 672 as of 2024. If you are above that, you are already ahead of the curve. If you are below, the path to improvement is well-defined and achievable within months.
How lenders pull your score when you apply
When you apply for a credit card, mortgage, car loan, or line of credit, the lender pulls your score from one or both bureaus. Some lenders only check Equifax, others only TransUnion, and many check both.
Because your scores can differ between bureaus, it is worth knowing both numbers. A missed payment reported to Equifax but not TransUnion will only hurt your Equifax score. This is why monitoring both reports matters.
Lenders also look beyond the score itself. They review your full credit report - payment history, account ages, outstanding balances, and any derogatory marks. Your score gets you in the door, but the report tells the full story.
Cheat sheet
- Canadian credit scores range from 300 to 900 - higher is better
- Equifax and TransUnion are the only two credit bureaus in Canada
- Your score predicts the probability you will repay over the next 12-24 months
- Check your score free: Borrowell (Equifax) or Credit Karma (TransUnion)
- Lenders may pull one or both bureau scores - monitor both
Common pitfalls
- Assuming your Equifax and TransUnion scores are the same - they often differ
- Thinking a high income automatically means a high credit score
- Never checking your credit report and missing errors that drag your score down
Did you know?
About 1 in 5 Canadian credit reports contains at least one error. Checking both your Equifax and TransUnion reports annually is free and can catch mistakes before they cost you.
This week's action
Pull your free credit report from Equifax and TransUnion today - it's your right, it's free, and you need to know your starting number.