Your Credit, Demystified.
Your credit score is one of the first things a lender looks at when you apply for a mortgage — but it's often misunderstood. Here's a plain-English look at what a score actually reflects, what moves it, and how to keep your credit in good shape as you prepare to apply.
What a score reflects
A snapshot of how you've handled credit over time.
In Canada, your credit score is a three-digit number (generally ranging from 300 to 900) calculated by credit bureaus such as Equifax and TransUnion. It's a summary of the information in your credit report — a running record of how you've borrowed and repaid over time.
A higher score suggests to a lender that you've managed credit responsibly and are statistically less likely to fall behind. A lower score doesn't mean the door is closed; it simply means a lender will look more closely at the rest of your picture. Your score is only one input, alongside your income, down payment, debts and the property itself.
Scores are not fixed. They change as new information reports each month, so the number you see today is a moment-in-time reflection rather than a permanent label.
What affects your score
These are the main factors bureaus weigh — in rough order of impact.
Whether you pay your bills on time is typically the single largest factor. Late payments, collections and missed obligations can weigh heavily, while a long run of on-time payments builds strength.
How much of your available credit you're using. Carrying balances close to your limits tends to lower a score; keeping balances well below your limits generally helps.
How long your accounts have been open. A longer track record gives the bureaus more to work with, which is why closing your oldest card isn't always helpful.
Opening several new accounts or applying for credit many times in a short window can signal risk. Each application by a lender is a "hard" inquiry that may nudge your score.
A blend of credit types — for example a revolving credit card alongside an installment loan — can be viewed positively, showing you can manage different kinds of borrowing.
How lenders use it
One factor among several — but an important one.
When you apply for a mortgage, a lender pulls your credit report and score as part of assessing your application. Your score can influence whether an application moves forward, which rate tier you may be offered, and which products or lenders are available to you. A stronger credit profile generally opens up more options; a thinner or bruised one may point toward alternative solutions.
It's important to keep this in perspective: a good score does not guarantee approval, and every lender applies its own guidelines. Final lending decisions rest with the lender and depend on the borrower, the property, the documentation provided and current lender guidelines. To see how a lender pieces all of this together, read more about how mortgage underwriting works.
Staying application-ready
Small, consistent habits do more than any quick fix.
Pay on time, every time
Set up automatic payments or reminders so nothing slips. Consistent, on-time payments are the most reliable way to build and protect a score over time.
Keep balances low
Aim to use a modest portion of your available credit rather than running cards near their limits. Paying down revolving balances before you apply can help your profile.
Avoid new debt before applying
Try not to open new loans or credit cards, finance a car, or take on large purchases in the months leading up to a mortgage application, as new obligations can shift your picture.
Check your own report
Review your credit report regularly and correct any errors. Checking your own credit is a "soft" inquiry — it does not hurt your score — so it's worth doing well before you apply.
Related pages
Mortgage Qualification
How lenders assess whether you qualify and how much you may be able to borrow.
Underwriting
What happens behind the scenes when a lender reviews your application.
Mortgage Documents
The paperwork lenders typically ask for to support an application.
Pre-Approval
Getting a clearer sense of your budget before you start shopping.
Building toward a mortgage?
Let's make sure your credit is application-ready.