How Credit Scores Are Calculated in Canada: Equifax and TransUnion Explained
Updated
Your credit score is a three-digit number that summarizes your creditworthiness. In Canada, two credit bureaus — Equifax and TransUnion — calculate and maintain your score. Here’s exactly how it works.
The two credit bureaus
Feature
Equifax
TransUnion
Headquarters
Atlanta, GA (Canadian operations in Toronto)
Chicago, IL (Canadian operations in Burlington, ON)
Most mortgage lenders pull both Equifax and TransUnion
Score used
Typically the lower of the two scores
Co-borrower
Lower score of both applicants is used for qualification
B-lenders
May be more flexible about which bureau/score they emphasize
The five scoring factors
Factor
Weight
What It Measures
1. Payment history
35%
Whether you pay on time
2. Credit utilization
30%
How much of your available credit you’re using
3. Length of credit history
15%
How long your accounts have been open
4. Credit mix
10%
Variety of credit types (cards, loans, mortgage)
5. New credit inquiries
10%
Recent applications for new credit
Factor 1: Payment history (35%)
The single most important factor. Lenders want to see that you pay your bills on time, every time.
Payment Behaviour
Impact on Score
All payments on time
Positive — builds score consistently
1 payment 30 days late
–60 to –110 points
1 payment 60 days late
–80 to –130 points
1 payment 90+ days late
–100 to –150 points
Account sent to collections
–50 to –100 points
Bankruptcy filed
–150 to –250 points
Consumer proposal filed
–100 to –200 points
What counts as a payment: Mortgages, credit cards, lines of credit, car loans, personal loans, cell phone bills (if reported), utilities (if sent to collections). Not all creditors report positive payment history — but they almost always report negatives.
Factor 2: Credit utilization (30%)
Credit utilization is the ratio of your credit card balances to your credit limits.
Utilization Level
Impact
Example ($10,000 limit)
0%–9%
Best for score
$0–$900 balance
10%–29%
Good
$1,000–$2,900 balance
30%–49%
Neutral to slightly negative
$3,000–$4,900 balance
50%–74%
Negative
$5,000–$7,400 balance
75%–100%
Very negative
$7,500–$10,000 balance
>100% (over-limit)
Severely negative
Over $10,000
Important nuances:
Utilization is calculated per card AND as a total across all cards
The balance reported is typically your statement balance, not your current balance
Even if you pay in full each month, a high statement balance hurts your score
Strategy: Pay down balance before statement date, not just before due date
Factor 3: Length of credit history (15%)
Metric
What It Measures
Good Benchmark
Average age of accounts
How long all your accounts have been open on average
7+ years is strong
Oldest account age
How long your oldest credit account has been open
10+ years is excellent
Newest account age
How recently you opened an account
Recent openings lower the average
Why closing old cards hurts: When you close your oldest credit card, your average account age drops and your total available credit decreases (raising utilization). Keep old accounts open, even if rarely used.