Understanding Your Credit Score

Your credit score is a key factor in your overall financial wellbeing. It reflects your creditworthiness and directly affects how much you can borrow, the interest rates lenders offer, and the potential fees you may encounter throughout the mortgage process.

What Determines Your Credit Score

Your score is calculated based on the information in your credit report, including:

1. Payment history
2. Total amount of debt
3. Length of credit history
4. Types of credit used
5. Frequency of new credit inquiries

Across Canada and the United States, most lenders rely on the FICO scoring system, which ranges from 300 to 900.

What Your Score Means

Higher Scores (750+)

1. Strong chance of mortgage approval
2. Access to competitive interest rates
3. Lower borrowing costs
4. May qualify for a smaller down payment
5. Can save thousands over the lifetime of a mortgage

Lower Scores (Below 600)

1. Harder to obtain financing
2. Higher interest rates
3. Larger down payment requirements
4. Increased monthly payments
5. Stricter lending conditions

How to Improve and Maintain a Strong Credit Score

✅ Make timely payments

Paying your bills on time is the foundation of a strong credit score. Set up reminders or automatic payments to avoid missed due dates.

✅ Manage your credit utilization

Use less than 30% of your available credit. Lower balances signal responsible financial behaviour and help boost your score.

✅ Be selective when applying for new credit

Open new accounts only when necessary. Multiple applications within a short period can negatively impact your score.

✅ Review your credit report regularly

Monitor your report for errors or inconsistencies. Dispute any incorrect information to ensure your credit profile remains accurate.

✅ Build a solid credit history

A longer credit history improves your score. If you’re new to credit, a secured credit card or becoming an authorized user on a trusted account can help establish your profile.