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Credit Score


It’s often mentioned how important it is to build your credit report and maintain your credit history well these days, but what does that really mean?

What is a credit score?

A credit score (also known as a score or score) is basically a number that tells lenders about your creditworthiness – that is, the likelihood of you paying off a loan based on your credit history. This number is calculated by credit rating agencies, based on information contained in your credit report.

A credit score, can vary between 300 and 900, which is the perfect score. Generally, a score of 760 and above is considered excellent. A score between 700 and 759 is also very good.

A credit score of less than 560 is considered low. The better your credit rating, the better your chances that a financial institution will grant you what you want on favorable terms.

Equifax and TransUnion Canada

In Canada, Equifax and TransUnion Canada are the two agencies that assess your credit. They create credit reports and scores for Canadian consumers, based on information provided to them by creditors. These agencies then sell your score to financial institutions, lenders, and merchants, to help them make decisions when doing business with you.

We often hear about the Beacon Score, which is actually the name of Equifax’s credit score. According to legend, the word “Beacon” comes from beacon lights , those lights on planes that flash to signal their position and prevent collisions. The name of the coast can therefore vary between credit bureaus, but it is generally the same mathematical algorithm that is used .

Factors That Can Influence Your Credit Score

To understand how your credit score works and how to improve it, it is important to know what factors are taken into account when evaluating a credit report.

1. Payment history (35%) . Any delay of thirty days or more will be noted in your file and will affect your score. The longer the delays, the greater the damage.

2. Balance owed against the credit limit (30%) . The average of the amounts due in each of your accounts influences your score. An average greater than 50% of the authorized credit negatively affects your score, even if you pay the total balance at the end of the month. The ideal is to stay at 35% or less of the authorized limit.

3. Age of your accounts (15%) . If your accounts have been around for a long time, your creditors can more easily assess your repayment habits. So, the longer the history, the better your score.

4. New credit requests (10%) . Each time a lender checks your credit report to grant you a loan or grant you a credit card , a note is placed on your file.

5. Number of creditors and variety (10%) . Creditors believe that the more creditors you have, the greater your risk of indebtedness.

Credit Score Myths

The credit rating drags its share of misconceptions. It is therefore important to clarify certain points.


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