Our complete guide to credit scores

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KOHO

KOHO

Koho pays your line of credit on your behalf 
:

  • $7 per month for 6 months (renewable)
  • $42 upfront for 6 months
- Legal age 18 
- SIN number
- Have a KOHO card (free) 
Increase your credit score by 20 points on average in 6 months 
Check your credit score evolution live on the KOHO app
No credit history required
No need to apply for any other KOHO program 
Safe, easy and affordable tool for building your credit score. All your payments are reported to Transunion to increase your score.
Sign up with "HELLOSAFE" code and get $20
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Refresh Financial | Improve Your Credit Score

Sprint pack

Credit builder loan and secured credit card
Based on your credit size :

$21.44 to $122.25 biweekly


Duration: 36 to 60 months 


Interest rate: 19.99% 
- Legal age 18 
- Permanent resident in Canada
- Have an active bank account
- Proof of monthly income 
- Provide a security deposit
Automated payments are applied to your loan balance
Monthly or bi-monthly payment schedule
Paying off a refresh financial credit builder loan will help you quickly build your credit.Sign-Up
Refresh Financial | Improve Your Credit Score

Jog pack
Credit builder loan only 
Based on your credit size:

$21.44 to $122.25 biweekly


Duration: 36 to 60 months 


Interest rate: 19.99% 
- Legal age 18 
- Permanent resident in Canada
- Have an active bank account
- Proof of monthly income 
- Provide a security deposit
Make payments into a secured account 
You can access it at any point to withdraw your savings 
Your payments are reported to the credit bureaus
No credit history required 
This "set it and forget it" option is the perfect solution to build your credit almost effortlessly.Sign-Up
Refresh Financial | Improve Your Credit Score

Walk pack
Secured credit card only
Annual fee: $12.95/year

Maintenance fee: $3.00/month


Interest rate: 17.99%
- Legal age 18 
- Permanent resident in Canada
- Have an active bank account
- Proof of monthly income 
- Provide a security deposit
The amount of credit available to you=security deposit submitted.
The security deposit is refunded to you when you cancel your card
Helps you improve your credit rating by building a positive payment history
The Refresh Financial Secured Card is a great option for anyone who has bad or no credit and is having trouble getting approved for a credit card. It’s very easy to qualify for and works like a regular card.Sign-Up
Credit card lender

Credit scores sound scary and complex to lots of consumers. However, it is important to know about your credit report affects your credit score and how your credit score impacts your ability to obtain a loan or credit card. It also impacts the amount of credit a lender will loan you and what type of interest rate they are willing to offer. The difference between a low and a high-interest rate could be the difference in saving you thousands of dollars over the years.

Did you know two companies in Canada that are responsible for compiling data on your credit history to build a complete financial picture for lenders to see? TransUnion and Equifax are the two major credit bureaus that help lenders to determine how risky it would be for them to lend to each consumer.

Our guide breaks down what a credit score and credit report are, how information is collected to establish a credit report and ultimately how they determine your credit score. It also covers what steps you can take to improve your credit and to make sure your credit report is correct and up to date.

What is a credit score?

In the most simple form, a credit score is a number between 300 and 900, that rates your creditworthiness. Credit scores are calculated using the information in your credit report, including your payment history, amount of debt incurred and the length of your credit history.

Credit scores are intended to help lenders and creditors make decisions on whether or not to extend credit to someone. They take a risk if you fail to pay back your loan, credit card or mortgage.

While your credit score is important, it is only one piece of the puzzle an organization will typically use to determine your creditworthiness.

TransUnion and Equifax are the main credit bureaus in Canada.

What is a credit report?

Your credit report contains many personal identifiers. You will find your current address as well as any past addresses you have lived at. It will also contain your social insurance number, date of birth and employment information. The bulk of your report will contain your credit account history, credit inquiries and public records. Lenders will report on your credit activity each month to the credit bureaus. Each time you inquire about a new loan or line of credit, that will also be reported to credit agencies such as TransUnion and Equifax and added to your credit report. Mortgage defaults or bankruptcies are reported to the credit bureaus and are in the public records.

What affects a credit score?

Many different factors can affect your credit score including a credit inquiry. Most financial institutions define a credit inquiry as a request for credit report information from a credit-reporting agency. Credit inquiries can be from all types of entities for various reasons, but they are typically made by financial institutions. They can be classified as either a hard inquiry or a soft inquiry.

A hard inquiry of your credit will affect your credit report more significantly than a soft inquiry. A soft inquiry can occur when you check your credit report or another entity checks your credit as part of a background check, for example. Hard inquiries, on the other hand, are requested from a credit bureau whenever you complete a new credit or loan application. They are retrieved by using a consumer’s social insurance number and are required for the credit underwriting process. A hard inquiry will provide a creditor with a copy of your full credit report which will include your credit score and details on your credit history.

In addition to credit inquiries, items such as bankruptcy, a consumer proposal or any form of default can significantly affect your credit score.

How do I check my credit score?

In Canada, there are a few ways to check your credit score and see your credit report. The easiest is by clicking the link below:

Check your credit score now

Get my credit score

If you prefer, you can check your credit report directly with both Equifax and TransUnion. Equifax will include your credit score too, but TransUnion does not (except for Quebec residents). There are several ways to reach them:

Order by credit report by mail:

  • Make your request in writing using the forms provided by Equifax and TransUnion
  • Provide copies of two pieces of acceptable identification, such as a driver's licence or passport
  • You must receive your credit report by mail

Order by telephone:

Equifax Canada

Tel: 1-800-465-7166

TransUnion Canada

Tel: 1-800-663-9980 (everywhere except Quebec)

Tel: 1-877-713-3393 (for Quebec residents)

You will confirm your identity by answering several personal and financial questions. You may also need to provide your Social Insurance Number and/or a credit card number to confirm your identity.

You can also obtain a credit report with Equifax or TransUnion online directly from the credit bureaus:

To obtain your free credit report online with Equifax, you can do so by visiting their online portal.

If you are just looking to obtain a free annual credit report without a score, you can do so by creating a TransUnion account on their online member portal.

You also have the option to obtain your credit score with many banks and credit card companies.

How to access your credit score for free from Canada’s Big Five banks:

If you prefer to check your credit score through one of Canada’s Big Five banks, follow the instructions included in each link:

BankHow to Check Your Credit Score
RBCGet your credit score with RBC
CIBCGet your credit score with CIBC
ScotiabankGet your credit score with Scotiabank
BMOGet your credit score with BMO
Credit Score from RBC, SIBC, Scotiabank, BMO

Note that TD Bank does not offer customers direct access to their credit score at this time. Instead, it refers them to Equifax and TransUnion.

What is a good credit score?

Generally speaking, lenders will consider a good credit score a 660 or above. Keep in mind, however, your credit score is not the only factor that will impact their decision to extend credit.

A credit score is a number that reflects how risky your profile is to a lender. It is divided into categories ranging from poor (under 559) to excellent (above 760). Creditors use it to decide if they will offer a loan, the terms and interest rates. 

CategoryCredit Score
Poor300-559
Fair560-659
Good660-724
Very Good724-759
Excellent760-900
Credit score rankings

When you apply for a car loan, for example, a lender will not only take into account your credit score but your employment history, monthly income and the value of the car. If your credit score is below a 660 score threshold, it may be more difficult to get lender approval or a good term and interest rate. 

Maintaining a good credit score has numerous benefits. For example:

Not only does maintaining a good credit score give you peace of mind, but it also has tangible benefits. A good credit score will help you to secure loans or lines of credit but the higher the credit score, the lower the interest rate and term you will likely have which will save money over time. 

What is a bad credit score?

In Canada, a bad credit score is a score of 574 or less. Being under this number means that banks, lenders, and landlords will consider you a financial risk. They may not lend at all to you. If they do so, they are almost certain to change higher interest than borrowers with a higher score.

The average credit score in Canada is 650.

A bad credit score will hurt you in the following ways:

A bad credit score or poor credit history will lead to potentially higher interest rates and fewer loan options as lenders will be less likely to provide you with a loan. It can also make it harder to find housing as some landlords may refuse to rent to you. In some cases, it can count against you when trying to find your dream job. Employers can and do check your credit report before hiring you.

How to improve my credit score?

If you want to improve your credit score there are right ways to go about it and also wrong ways. Did you know using credit responsibly actually helps improve your score? Here are some actions you can take right now to start improving your credit score:

  • Inspect your credit report and score; dispute any inaccurate items you may find
  • Pay your bills on time
  • Keep a low balance on your lines of credit
  • Keep old credit active
  • Plan how you spend your credit
  • Consolidate your debt
  • Pay in full if and when you can.
  • Use some credit for small purchases (think: buying gum at the gas station) and pay it off.
  • Pay down as much as you can to improve your credit utilization
  • Take out a secured credit card with companies such as KOHO

Wondering the secrets to getting a good credit score? 

We know some of the best experts that are available to help you get the best credit score possible.

Why did my credit score drop?

Unfortunately, there are many reasons why your credit score may have dropped. Late payments, many credit inquiries, legal judgments, debt collection, a consumer proposal and bankruptcy are a few items that would cause a drop in credit score. For example, credit inquiries will stay on a credit report for two years if you live in Quebec and one year in other provinces.

How long does it stay on a credit report:

ItemTime
BankruptcyUp to 14 years
Consumer proposalUp to 6 years
CollectionsUp to 6 years
Credit checksUp to 2 years
Late Payment6 years
Debt Collection6 years
Duration of credit report

How can I fix an error on my credit report?

If you feel there is an error on your credit report, you can dispute it directly with Equifax or TransUnion

For Equifax, you can receive the form by email, complete it electronically and email all of your documentation to Equifax. You can also print and mail in your completed dispute form and include copies of the required documents.

If you would like to dispute with TransUnion, you can file a free dispute with TransUnion on their online portal.

If you are feeling overwhelmed or need to fix multiple errors across multiple reports, speak with an expert who will help ease what can be a daunting process.

What credit score is needed for a house? For a car? For a credit card?

Unfortunately, there is not a one size fits all credit score needed for every individual or every purchase that they may make. Buying a home may require a higher credit score while buying a car or obtaining a credit card may not have as strict requirements. Traditional lenders look at credit scores along with credit history, employment history and income. Alternative lenders and online lenders have different standards and while they may be able to approve you with a lower credit score, it will come at a cost. What is sure is that the higher the score the better the chance of being approved for a bigger amount and at better rates.

Links to mortgage, car loan, credit card articles

Tips for improving your credit score:

If you are wanting to improve your credit score there are right ways to go about it and also wrong ways. Did you know using credit responsibly actually helps improve your score? Here are some actions you can take right now to start improving your credit score:

  • Pay credit cards and loans on time. 
  • Pay in full if and when you can.
  • Use some credit for small purchases (think: buying gum at the gas station) and pay it off.
  • Pay down as much as you can to improve your credit utilization
  • Take out a secured credit card with companies such as KOHO

More articles about credit scores

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