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What Is a Credit Score?

July 24, 2025

By Sarah Sumner


Credit Score Impact


A credit score predicts how likely a person is to pay back a loan on time. It is typically derived from a mathematical formula based on information in a credit report.


Your credit score may impact getting a credit card, banking account, mortgage, or other types of loans. If you are offered a loan, your score could factor into how much money you can borrow and at what interest rate. It could even determine if a landlord will rent to you.


Credit Reporting


There are two main credit reporting agencies in Canada: TransUnion and Equifax. These agencies offer credit scores and credit reports that show your credit activity and history.


Credit Score Ranges


Popular scoring models include FICO® and VantageScore®. Each has its own range, but generally scores are grouped as Poor, Fair, Good, Very Good, and Excellent.


Impacts on Your Credit Score


  • Bill payment history
  • Debt-to-credit ratio
  • Credit mix
  • Length of credit history
  • New credit

How to Build Your Credit Score


  • Make payments on time
  • Pay down debt
  • Limit new applications
  • Review credit reports for errors

Know Your Numbers


By knowing what goes into your credit score, you can build good habits, prevent negative impacts, and protect your credit with helpful resources.


This information is presented for educational purposes only. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions.

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