Many people don't realize that their credit score is one of the most important pieces of information about them. Since financial institutions and lenders look at your credit score to determine whether to give you credit, how much to give you and sometimes the interest rate you're offered, it's in your best interest to keep your credit score in good standing.

Even if you're not considering applying for a loan anytime soon, your credit score can also be a quick way to judge your character in other situations, for example, a potential landlord or employer might be concerned about a low credit score as it may imply that you have issues managing your money and that you might not pay your rent or pay it on time.

Since your credit score plays such a critical role in your life, you'll want to ensure you keep yours in good standing.

In this article

What is a credit score range in Canada?

Your credit score falls into one of five categories:

Illustration which outlines numbers associated to credit score ranges.  Excellent: 833 - 900 Very good: 790 - 832 Good: 743 - 789 Fair: 693 - 742 Poor: 300 – 692.
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Did you know? The average Canadian has a credit score of 667^.

In Canada, the highest credit score you can get is 900. Striving for an excellent credit score is great, but there's no reason to obsess over it since you'll never have a perfect 900. Generally speaking, if your credit score is above 660 (good), you likely won't have too many issues getting approved for credit. That said, a higher credit score does give lenders peace of mind, and it may also help qualify you for lower interest rates when buying a home and be offered lower interest rates on other credit products as well.

If your credit score is in the poor to fair range, it could be one of the reasons why you might not be getting approved for a credit card, line of credit, mortgage or loan.

It's worth noting that Canada has two main credit bureaus: Equifax and TransUnion. These are two separate private companies, and the information they have access to may differ, so your credit score will usually differ between the two.

What affects your credit score?

Overall, there are five main factors that affect your credit score:

Payment history

Lenders like to see you making regular payments on time and for at least the minimum amount required. Late or missed payments, and payments for less than the amount required, would likely lower your credit score.

Credit utilization

Your credit utilization ratio is how much credit you're using relative to how much total credit you have access to. Generally speaking, you'll want to keep it under 35%.

Types of credit

Different credit types, such as credit cards, a mortgage, and a line of credit, could affect your credit score.

New loans

Applying for a new loan could lower your credit score since a hard check is performed.

Credit history

Credit bureaus like to see a record of how you manage your credit, so getting a credit account early could raise your credit score.

While the above factors determine your overall credit score, it's worth noting that whenever a lender does a hard check on your credit history, your credit score will decrease by a few points. A hard check is usually only performed when lenders need to see a detailed look at your credit history. This would include a formal application for credit like a mortgage, credit card, or auto loan.

Lenders can also perform a soft check that doesn't affect your credit score. These are done when lenders want to quickly see your credit score or report.

Check out this detailed guide to learn more about what affects your credit score.

How to check your credit score

Since your credit score has an important role in your life, it's a good idea to check it regularly. Fortunately, there are a few ways to access your credit score for free, including:

Getting a free credit score in Canada is easy and checking it doesn't decrease your score. However, your credit score is just a number for quick reference. You can order your credit report from TransUnion and Equifax for a more detailed look at your credit profile. This profile would show you all the accounts that you've opened and closed in the last seven years.

Scotiabank customers can access their credit score for free via the CreditView section of the Scotiabank mobile app or through your online Scotiabank account.2 Your credit score is updated monthly and it's not affected negatively when you check it.

What is an average good credit score?

Back in 2018, Equifax Canada released the results of a generational survey3 that listed the average credit score by age. The results were as follows:

 Credit scores ranges
Range Ranking

300-692

Poor

693-742

Fair

743-789

Good

790-832

Very good

833-900

Excellent

Average credit score by age
Age Avg. credit score Ranking

18-25

692

Poor

26-35

697

Fair

36-45

710

Fair

46-55

718

Fair

56-65

737

Fair

The survey found that those aged 18 - 25 saw their credit score increase compared to 10 years ago. However, all other ages saw their credit score decline over the same period. Although it's speculative, some believe the increased credit score for the younger age group is due to the fact that they were younger and likely didn't have a credit score yet. The other theory is that younger people have learned from their older peers and have put an effort into increasing their credit.

How to improve your credit score

Once you know your credit score, you can take steps to increase or maintain it. Many of the following tips don't require much work, but they can have a significant impact on your credit score over time.

Don't miss any payments

It's always a good idea to make your payments in full and on time by the due date. Not only will this show solid payment history, but you'll also avoid having too much debt.


Be smart about how you use your credit

Since your utilization ratio is a major factor that determines your credit score, you'll want to limit how much credit you use. Lenders will usually be concerned about consumers maxing out their credit accounts.


Build your credit early

The longer your credit history, the better it is for your credit score. See if a opening a credit card is right for you. 


Avoid too many credit applications

Your credit score will drop a few points every time you apply for new credit. If you apply for multiple credit products in a short period, lenders will wonder why you're trying to access so much credit.


Take a look at the big picture

A good credit score is essential, so understanding how it works can help you make smarter credit decisions. By paying your bills on time, minimizing the amount of credit you use, and avoiding too many new credit applications, you could increase or maintain your credit score.

The average Canadian has a credit score of 667^. Want to see how you compare?