Credit score

A credit score is a three-digit number that summarizes your credit history, meaning how you have handled loans, credit cards, lines of credit and other debts over time. Lenders use it as a quick read on how likely you are to pay back what you borrow. The number is calculated from data in your credit report, which records things like on-time payments, missed payments, how much of your available credit you are using, and how long your accounts have been open.

In Canada, two bureaus dominate the market: Equifax Canada and TransUnion Canada. Each keeps its own file on you, so your Equifax score and your TransUnion score can differ, sometimes by a noticeable margin, because the bureaus do not always receive the same information from the same creditors. Both generally use a scale from 300 to 900, with higher numbers pointing to lower risk. A score in the upper part of that range usually signals a strong track record, while a lower score suggests past late payments, high balances or collections activity.

The score matters most when you apply for a mortgage. Lenders, including banks, credit unions and private mortgage lenders, pull your score from one or both bureaus to help decide whether to approve the application and what terms to offer. Ontario buyers who are working toward homeownership through a rent to own arrangement often find that a credit check is part of the process too, so understanding where their score stands before they sign is useful. Your score is not the only factor lenders weigh, but it is one of the first things they look at.

If you want help reviewing your file or understanding what is affecting your number, you can find providers listed under mortgage and credit support in this directory.

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