Understanding Your Canadian Credit Score

What is a credit score? Your credit score and rating are produced by Equifax. Your credit score is also referred to as a FICO Score as the mathematical formulas behind your score were created by Fair Isaac & Company (FICO). This Credit Score is used by most lenders to help them decide whether or not you’re a good credit risk. Equifax crunches the numbers from your credit report, and spits out a score somewhere between 300 and 850. A low score says you’re a bad credit risk, a score of 750 or higher puts you in the driver’s seat.

Here are the factors considered when calculating your credit score and an estimate of how heavily each factor might be weighted.

  • Past payment history (35%): bankruptcies, late payments, past due accounts and wage attachments
  • Amount of credit owing (30%): amount owed on accounts, proportion of balances to total credit limits
  • Length of time credit established (15%): time since accounts opened, time since account activity
  • Search for and acquisition of new credit (10%): number of recent credit inquiries, number of recently opened accounts
  • Types of credit established (10%): number of various types of accounts (credit cards, retail accounts, mortgage)