Quick answers
Credit FAQ
Straight answers to the credit questions Canadians ask most. Tap a question to open it.
Credit scores
What is a good credit score in Canada?
Canadian scores from Equifax and TransUnion range from 300 to 900. Roughly 660 and up is generally considered good, 725 and up very good, and 760 and up excellent. Each lender sets its own cut-offs. Read the full guide.
Does checking my own credit score lower it?
No. Checking your own score or report is a soft inquiry and has no effect on your credit. Only applications for new credit create hard inquiries.
Why are my Equifax and TransUnion scores different?
Each bureau keeps its own file, lenders don’t always report to both, and different scoring models weigh things differently. Differences of 20 to 50 points are common.
How long does it take to improve my credit score?
Lowering your card balances can help within a statement cycle or two. Building a long record of on-time payments takes months to years. Negative items like late payments fade in impact over time and generally drop off your report after about six years.
Credit reports
How do I get my credit report for free?
Both Equifax Canada and TransUnion Canada let you view your report online for free, and you can also request it by mail or phone. Here’s how.
What should I do if there’s a mistake on my report?
File a dispute directly with the bureau that shows the error, online or by mail, with documents that support your case. The bureau will verify the information with the lender.
Credit cards
Do I pay interest if I pay my full balance every month?
Generally no. Cards from federally regulated institutions must offer an interest-free grace period of at least 21 days on new purchases if you pay the full statement balance by the due date. Cash advances usually start charging interest right away.
Is it bad to pay only the minimum?
It keeps your account in good standing, but it’s very expensive. On a $3,000 balance at 20.99%, minimum payments can take more than 18 years to clear. See the numbers.
Should I close credit cards I don’t use?
Closing a card removes its limit, which can raise your utilization, and closing your oldest card can shorten your credit history. If there’s no annual fee, keeping it open with a small purchase now and then is often better.
Debt
What’s the difference between debt consolidation and a consumer proposal?
A consolidation loan replaces several debts with one new loan, ideally at a lower rate; you still repay everything. A consumer proposal is a legal process filed through a Licensed Insolvency Trustee that can reduce what you repay, with a bigger impact on your credit. Compare the options.
Where can I get free help with debt?
Non-profit credit counselling agencies offer free or low-cost budgeting help and debt management programs. Licensed Insolvency Trustees offer free initial consultations about consumer proposals and bankruptcy.