What is a credit score in Canada?
Your credit score is a three-digit number, from 300 to 900, that sums up your borrowing history for lenders. Canada has two credit bureaus — Equifax and TransUnion — and each calculates its own score, so your two numbers will rarely match exactly. Lenders also look at more than the score itself, including your income, employment, and existing debts, but the score is often the first filter.
Equifax Canada groups scores into five bands:
- Excellent: 760–900
- Very good: 725–759
- Good: 660–724
- Fair: 560–659
- Poor: 300–559
A score of 660 or higher is generally considered good, and the best rates usually start at 725 and up. Your exact band matters more than the exact digit — and no single number guarantees an approval or a rate, because every lender sets its own cut-offs.
1. Pay every bill on time
Payment history makes up a significant chunk of your credit score, so this is the single highest-impact habit. One late or missed payment hurts, and the damage lingers: most negative information stays on your Equifax report for about six years.
If on-time payments are a struggle, set up automatic payments for at least the minimum due, and set up alerts so a due date never slips past you. Paying the full statement balance also keeps you clear of interest charges, but for your score, the on-time part is what counts most.
2. Keep your credit utilization at or below 30%
Your credit utilization ratio is the balance reported to the bureau compared with your total available credit. Equifax Canada says it is typically best to keep it at or below 30%. For example, if your credit limit is $10,000 and your reported balance is usually about $3,000, your utilization rate is 30%.
Three ways to get under that line:
- Spend less on credit and pay down existing balances.
- Pay more than once a month, so a lower balance is what gets reported.
- Ask your card issuer for a credit limit increase — the same balance is then a smaller share of a bigger limit. Only do this if a higher limit will not tempt you to spend more.
Note that utilization is measured on the balance that gets reported, which is usually your statement balance — not what you owe on the day you pay. Paying before the statement closes can help.
3. Check both of your credit reports for free
Before you try to fix anything, look at what lenders actually see. You can access your credit report and score free of charge from both bureaus, and checking your own file has no effect on your score — it counts as a soft inquiry, not a hard one.
The easiest free routes in Canada:
- Borrowell shows your Equifax score and report, updated weekly.
- Credit Karma shows your TransUnion score and report.
- Many Canadian banks also offer free score checks inside online banking, usually powered by TransUnion.
Watch both bureaus, not just one. A lender may pull either file, and an error on one report can drag down that score while the other looks fine.
4. Dispute errors — it costs nothing
Errors happen: an account that is not yours, a payment marked late when it was on time, a balance that is wrong. If something on your report is inaccurate, tell the bureau — there is no charge to dispute an item, and the bureau will investigate and update your file if the item is wrong.
One caution: no company can remove accurate negative information early. If a late payment or collection is correctly reported, it stays until its time is up, no matter what a “credit repair” service promises. Save your money and skip those offers.
5. Keep old accounts open
One factor in your score is the average age of your accounts, so closing an old card you have paid off can shorten your history and hurt your score — and it also shrinks your total available credit, which pushes your utilization up.
If an old card has no annual fee, keep it open and use it for a small purchase now and then so the issuer does not close it for inactivity. If it does charge a fee you no longer want to pay, weigh the fee against the effect on your history and available credit before closing it.
6. Limit new applications
Applying for new credit usually triggers a hard inquiry on your report, which can lower your score, particularly if you are at the lower end of the range. Hard inquiries stay on your Equifax report for three years.
That does not mean never apply — it means apply deliberately. Space out applications, and only apply for credit you actually need. A cluster of applications in a short window can make lenders think you urgently need money.
7. Be patient — rebuilding takes time
There is no overnight fix. How long improvement takes depends on your situation: bouncing back from one late payment or a few hard inquiries is faster than recovering from an account sent to collections or a bankruptcy. Paid-off collections still remain on your Equifax report for six years from the time they went into collections, though their sting fades as they age and as you build a longer run of on-time payments on top of them.
The honest timeline is months, not days — and that is normal. Every on-time payment and every month under 30% utilization adds to the record lenders see.
The bottom line
Improving your credit score in Canada comes down to a short list of habits: pay on time, keep balances at or below 30% of your limits, check both reports for free, fix errors, keep old accounts open, and apply for new credit sparingly. None of it is complicated — the hard part is doing it consistently for months. Start with the step that fits your file today, and let the months do the rest.
This is general information, not personalized financial advice. If you are dealing with collections, a consumer proposal, or bankruptcy, consider speaking with a licensed insolvency trustee or a non-profit credit counsellor about your options.
Disclosure: Next Level Canada may earn a commission if you apply through links in this article, at no extra cost to you. See our Affiliate Disclosure page for details.