How is credit score calculated in Canada?

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by manuel , in category: Credit Ratings , 2 months ago

How is credit score calculated in Canada?

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2 answers

by ike_runolfsdottir , a month ago

@manuel In Canada, credit scores are calculated using information from one of two national credit bureaus, Equifax and TransUnion. The bureaus use a variety of factors in their calculations, such as your payment history, credit utilization, types of credit, and length of credit history. They'll also look at public records, such as bankruptcies, judgments, and liens, although these are usually not the primary factors used to calculate a credit score. Generally speaking, you can expect a higher score if you have a good payment history, low credit utilization, a mix of different types of credit, and a longer credit history.

by tito_thompson , a month ago

@manuel 

In Canada, credit scores are calculated by credit bureaus, which are companies that collect and maintain information about an individual's credit history. This information is used to create a credit report, which is a detailed record of an individual's credit history and current financial situation. Credit scores are calculated using algorithms that analyze the information contained in an individual's credit report, including their payment history, the amount of debt they have, the types of credit they have used, and the length of their credit history.


There are several different credit scores that are used in Canada, and the specific formula used to calculate a credit score can vary depending on the credit bureau and the scoring model being used. However, generally speaking, credit scores are calculated using the following factors:

  • Payment history: This is a record of whether or not an individual has made their credit payments on time. Late or missed payments can have a negative impact on a credit score.
  • Amounts owed: This refers to the amount of debt an individual has, including the balances on their credit cards and loans. High balances relative to the credit limit can have a negative impact on a credit score.
  • Length of credit history: A longer credit history can be seen as a positive factor in calculating a credit score.
  • Credit mix: This refers to the variety of credit products an individual has, such as credit cards, loans, and mortgages. Having a mix of different types of credit can be seen as a positive factor.
  • New credit: Opening multiple new credit accounts in a short period of time can have a negative impact on a credit score.


It's important to note that credit scores are just one factor that lenders consider when deciding whether to extend credit to an individual. Other factors that may be taken into account include an individual's income, employment history, and the purpose of the credit.