Credit Score in Canada

A credit score is very important and often used for financing in Canada. Your credit score is first developed when you first borrow apply for credit or borrow money. A credit score is a judgement of your financial history at the given time. Your rating indicates the risk you represent for potential lenders. You are given a score from 300 to 900 with Equifax. A score less than 500 is terrible. A score between 500-579 is very poor. Between 580-619 is poor. Between 620 and 679 is average. Between 680 and 719 is good. Between 720 and 779 is very good. And finally a score of 780 or better is excellent.


There are five main factors which effect a credit score however there are three main ones that together make up 81% of your total credit score. The first main factor is recent credit which makes up 30% of your total credit score. Next is payment history which makes up 28% of your total credit score. This area reflects how often you pay bills on time. The third main area is utilization which makes up 23% of your overall credit score. This area represents the level of outstanding debt you have compared to what they think they can handle overall.

In Canada there are two companies that issue Credit Reports which are Equifax Canada and TransUnion Canada.  You can make a request in writing and send it by mail to both companies for a report of credit rating. If you do this online there are fees.

Equifax web site is  and Trans Unions

Website is .

Another method that some lenders use is rating your credit history items on a scale of 1 to 9. On this scale a rating of 1 means that you pay all of your bills within 30 days of the due date. On the other hand a rating of 9 means that you have failed to pay your bills or you have created a debt repayment proposal to the original lender.  Next to the number between 1 and 9 there is either the letter I, O or R. The “I” means that your previous credit was on an installment basis, such as for a car loan, where you only borrow money once. An “O” represents a line of credit or an open credit.  Lastly a “R” represents a revolving credit which means that you make payments in various amounts which are based off of the current balance in the account.

Equifax Canada and TransUnion Canada calculate your credit score using information from several sources.  Your report is first created when you first borrow money or if a credit card is issued to you. This information is important as your loan performance and your credit card history is a powerful tool to predict your future performance on loans.


Why do you not have a good credit rating?


Poor behaviour will not help your credit rating in Canada.  You need to stick to the terms of any credit agreement. Poor or bad behaviour will reflect on your Equifax or TransUnion credit report in Canada.  An example of this is making a credit card payment late or not even making the payment.

Even just making the minimum payment each month could reflect on your credit report.  Many lenders could assume you are struggling and not give you a loan.   Many Canadians believe that because they have not borrowed any money in the past they should have a good credit rating.  This is not true.  If you have moved to Canada recently or have never borrowed money you would either have a bad credit history or possibly not one at all.

In Canada the top things that can hurt your credit score are having too many accounts, having high account balances, too few accounts or recently used accounts, loan balances too high compared to the original loan amount, applying for too many credit cards or loans within the past 12 months and having a short credit history.

You may be wondering how to fix a bad credit score to turn it into a good one. The first thing you should do is request a free credit report each year. This will allow you to stay on top of your credit score. Additionally it is beneficial to check your report to make sure it is accurate. Furthermore, it is in your best interest to keep your credit card balance at 50% or lower. If you have high credit card debt it is likely that this is a dominant reason that your credit score is not as good as you would like it to be. Another common problem is when people have unpaid collections in regards to public records on their credit report. Examples of this are not paying parking tickets or cell phone bills. Once you pay these outstanding bills your credit score will increase. Another problem that will affect your credit score is a lot of late payments. When possible make sure to pay each bill on time.

Overall increasing a credit score often takes time and patience. First you need to pay off all outstanding debts completely. After this challenging but critical step is completed it is essential to always pay attention to your new balances and pay them off right away. If you continue to do this for a couple of years your credit score will increase. Sadly it is nearly impossible to change a bad credit score to a good one overnight but with continued effort and timely payments your score will eventually increase.

At Car Title Loans Canada we don’t use credit checks; instead we base your borrowing amount off of the value of your car. Once you are approved you get to keep your car and drive away with your new cash. We don’t care about any of your financial history we are just here to help solve any of your financial problems. We know it will take people a long time to increase their credit scores and we know people need money as soon as possible. This is why we are offering car title loans with no credit checks.