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How Are Credit Scores Calculated in Canada?

To the point How are credit scores calculated by Equifax and Transunion in Canada? Here are some details and our tips on credit score and credit report.

Many people think applying for credit cards can be harmful to the credit score. However, a credit card application is not the only element of your credit score!

By setting short- and medium-term goals, let’s see how to improve your credit score to get the best credit card offers in Canada!

Build, improve or repair your credit score

The credit report intrigues a lot of people. Indeed, there is not much information on the subject, and this remains quite unclear for many.

You’ll find out below how the credit score is calculated. If you prefer to watch our video, here it is:

Payment history - 35%

35% of your credit score comes from your payment history to pay your balances on time. It will tell lenders if you are a good borrower or not.

If you want to increase your credit score, pay each of your credit card balances in advance without waiting for the credit card statement.

Credit Utilization - 30%

30% of your credit score comes from your monthly credit utilization granted by different lenders (mortgage, line of credit, credit cards, etc.)


  • Monthly, you use $2,500 of your available credit, consisting of a single credit card with a $5,000 credit limit. Your credit utilization rate is 50%.
  • Now, you have two credit cards with a $5,000 credit limit on each, and you still use $2,500 of your total credit limit. Your credit utilization rate will drop to 25%.

We recommend you to keep a credit utilization rate of less than 30%.

Credit History - 15%

15% of your credit score comes from your credit history in Canada for all your credit lines (credit cards, mortgage, auto loans, student loans, etc.).

An average is calculated to establish this score. Thus, we recommend you to keep an “old” credit card active to boost your average.

Types of credit - 10%

10% of your credit score comes from a credit diversification (mortgage, line of credit, credit cards, etc.)

Lenders are reassured when you demonstrate the strict management of your finances. The more different types of credit you have (properly repaid each month), the better your credit score will be.

Credit inquiries - 10%

10% of your credit score comes from your new credit inquiries (credit cards, loans, etc.). Each time you make a credit inquiry, your credit score will be affected, and a few points will be lost.

These points are usually recovered in a few months if you follow the above guidelines (including punctuality and credit utilization rate).

Build a credit score

If you just start hunting for points and miles, as your credit report is new, we will advise you to start with a no annual fee credit card and keep it as long as possible. There are more than a dozen of them.

Keeping a credit card for many years will improve your credit history (15% of your credit score).

Here are some great ones to begin with for your credit history:

A card like the BMO® AIR MILES® Mastercard®* is valuable in more ways than one because it:

  • is issued by a major Canadian bank
  • offers 1 AIR MILES reward mile for every $20 you spend on your credit card
  • is accepted at Costco
  • offers extended warranty and purchase protection!

It’s a card you can keep year after year.

The other cards

Check out our monthly ranking of the best credit card offers to find the one that fits your needs!

The choice of credit bureaus per issuer

You can check your credit report with the two major credit bureaus. Here are our two posts about it:

Be aware that credit card issuers will check your credit report from one of these bureaus at the time of your application. Afterwards, your new account will be reported to both bureaus.

Equifax Transunion
National Bank American Express
President’s Choice Scotiabank
CIBC Canadian Tire
Desjardins MBNA
TD Bank Rogers

American Express and MBNA can check both bureaus, although they generally go for Transunion.

equifax sommaire score

Improving your credit score

Here are some tips to get a good credit score or improve it:

  • Stay away from your credit card limits(30% of your credit score)
  • Pay your balances on time (35% of your credit score!)
  • Frequently pay your balance before the credit card statement to boost your credit score
  • Keep credit lines opened for as long as possible (thanks to a no annual fee credit card you keep year after year / 15% of your credit score)
  • Don’t ask for new credit cards before a mortgage appointment
  • Do not apply for unnecessary credit cards (especially department store cards or the one with no real advantage for you, etc.)
Our tips

For details on all these tips, read this complete post.

Repairing your credit score

You can transfer your credit card balances to some specific credit cards, but you have to meet your new deadlines scrupulously!

These are, for example, MBNA’s “True Line” credit cards (description here),which regularly offer balance transfer offers.


For those who are having trouble repaying their credit cards due to high-interest rates, we advise you not to go on “points and miles hunting” until you completely restore this situation.

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