What Makes Up Your Credit Score in Canada
July 11, 2026 | Posted by: Alex Vinarski
What Makes Up Your Credit Score in Canada?
Your credit score is one of the most important factors lenders consider when you apply for a mortgage. Whether you're buying your first home, refinancing, or applying for a private mortgage, understanding what affects your credit score can help you qualify for better financing options.
In Canada, credit scores typically range from 300 to 900. While every lender has different requirements, a higher score generally means more borrowing options and better interest rates.
Here are the five main factors that make up your credit score:
1. Payment History (Approximately 35%)
Making all your payments on time—including credit cards, loans, and lines of credit—shows lenders that you're a reliable borrower. Even one late payment can negatively impact your score.
2. Credit Utilization (Approximately 30%)
Credit utilization refers to how much of your available credit you're using. As a general rule, try to keep your balances below 30% of your credit limits. Lower utilization demonstrates responsible credit management.
3. Length of Credit History (Approximately 15%)
The longer you've had credit accounts open, the better. A long, positive credit history gives lenders more confidence in your borrowing habits. Avoid closing your oldest credit cards unless there's a good reason.
4. Types of Credit (Approximately 10%)
A healthy mix of credit can benefit your score. This may include credit cards, car loans, personal loans, lines of credit, and mortgages. Responsible management of different types of credit shows you can handle various financial obligations.
5. New Credit Inquiries (Approximately 10%)
Every time you apply for new credit, a hard inquiry may be recorded on your credit report. Multiple applications within a short period can temporarily lower your score. If you're planning to purchase a home, it's wise to avoid applying for unnecessary credit beforehand.
What If Your Credit Isn't Perfect?
A lower credit score doesn't necessarily mean you can't qualify for a mortgage. Many Canadians, especially self-employed borrowers or those who have experienced financial challenges, still have financing options. I have done mortgages for clients with credit score under 500.
As a mortgage broker and private mortgage lender specializing in private mortgages, mortgages with bad credit and mortgages for self-employed borrowers in Vancouver and throughout British Columbia, I work with a wide range of lenders—not just the banks. Together, we can explore solutions that fit your unique financial situation.
