Your credit score is determined by your credit history. Every time you apply for or receive credit, and every time you make or don’t make a payment on time and use your credit you are building your credit history.

When you apply for credit, there are three ways your financial institution will evaluate your credit history:

• Review your past dealings with them;

• Consider any new information you provide in your credit application;

• Contact a third-party credit agency for a report on your overall credit history.

Credit companies collect information from the companies that provide the credit to you. This builds your credit report [ history, which represents a summary of your activities with a variety of financial institutions.

It is good practice to request the details of your credit report from the credit agencies periodically, to help you understand your rating and ensure that the information is correct. This is important because a strong credit record enhances your ability to get credit in the future, whereas negative reports such as overdue payments or non-payments, could make it more difficult for you to borrow or get credit in the future.

Your credit score from other countries will generally not be used in Canada. Two companies in Canada gather the information to provide you with a score – one of them is Equifax  and the other is TransUnion

EquifaxⓇ notes that a good credit score in Canada is usually between 660 to 724. If your credit score is between 725 to 759 it’s likely to be considered very good. A credit score of 760 and above is generally considered to be an excellent credit score.1 The credit score range is anywhere between 300 to 900.1 The higher your score, the better your credit rating.1

Your credit score helps lenders to assess your credit capacity.2 The higher your score, the more likely you are to get approved for loans and credit.2 It may also be checked when applying to rent a property or when applying for certain jobs.2 However, everyone’s financial situation is different and your credit score will change over time based on your credit history and the amount of debt you owe.

EquifaxⓇ and the Government of Canada note the following information is assessed to determine your credit score:

• How consistent have you been in paying off the money you have borrowed? Note that opening a credit card is considered borrowing money and will be taken into account3

• The amount of credit that a bank or credit card company has given you versus how much you have used up3

• The length of your credit history – this is something you can’t impact when you first arrive but the earlier you start building your credit, the better3

• You should also avoid applying for too many loans, having too many credit cards, and requesting too many credit checks in a short timeframe.4 That’s because it could negatively impact your credit score too.4

Learn more about TD’s New to Canada Banking Package today.   

Book an appointment to talk to a TD Personal Banking Associate about the TD New to Canada Banking Package. You can book online right away, or visit the TD website to learn more.

 1 What is a Good Credit Score, Equifax Canada.

2 Credit Report and Score Basics.  Government of Canada, May 13, 2020

3  How are Credit Scores Calculated, Equifax Canada.

4  Improving Your Credit Score. Government of Canada, 13 May 2020.

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