Credit Scores Explained: What Lenders Actually See

In Canada, credit scores run from 300 to 900. Most people never see the exact number their lender uses, and the free scores from apps can differ from what a bank pulls. Still, the ranges are useful to understand, because your score does not just decide approval, it decides your price.

As a general guide, a score in the high 600s or above is where most lenders start to feel comfortable, and scores in the 700s and up tend to unlock the best available rates. Below the mid 600s, you can still get financing, but you may face higher rates or need to look beyond the big banks. These are not hard cutoffs, they are tendencies, and every lender weighs the full picture rather than a single number.

Five ingredients drive most scoring models. Payment history carries the most weight, followed by how much of your available credit you are using. After that come the length of your credit history, the mix of credit types you manage, and how much new credit you have applied for recently. Notice what is not on that list: your income, your savings, and your job title do not appear in the score itself. They matter to the lender, but they are assessed separately.

The difference between a good score and a great one is not cosmetic. On a mortgage measured in the hundreds of thousands of dollars, even a modest rate difference compounds into tens of thousands of dollars over the life of the loan. That is why it is worth nudging your score up a tier before you apply rather than accepting the first offer you qualify for.

Do not obsess over the exact digits, focus on the behaviours behind them: pay on time, keep balances modest, and avoid a flurry of new applications before you buy. If you want to know how your score translates into a specific rate and approval amount, that is a conversation for a mortgage professional who can see the lender-side view.