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Credit Score

Understand how credit scores affect Canadian mortgage approval, what factors influence your score, and how to improve it before buying a home.

Credit Score

May 22, 2025


What is a Credit Score?

A credit score is a numerical rating that reflects a borrower’s creditworthiness and financial reliability based on past credit behavior.

Why Credit Scores Matter in Real Estate

In Canadian real estate, credit scores are a major factor in mortgage approval. Lenders use scores to assess the likelihood that a borrower will repay their loan responsibly.


Scores typically range from 300 to 900:
  • 680+ is considered good for mortgage qualification
  • Higher scores may result in better interest rates and terms


Scores are based on factors including payment history, credit utilization, length of credit history, recent inquiries, and types of credit.


Poor credit may limit options to higher-interest or alternative lenders. Borrowers should review and improve their scores before applying for a mortgage.


Understanding credit scores helps buyers prepare for mortgage success and secure more favorable financing.

Example of a Credit Score in Action

A buyer with a credit score of 735 qualifies for a competitive fixed-rate mortgage from a major bank.

Key Takeaways

  • Measures financial trustworthiness.
  • Used in mortgage and loan decisions.
  • Affects interest rates and terms.
  • Based on credit history and usage.
  • Can be improved before home buying.

Related Terms

Additional Terms

Recourse Loan

A recourse loan is a type of loan where the lender can pursue the borrower’s personal assets, beyond the collateral, in the event of default.. more

Pari Passu

A pari passu clause is a contractual provision ensuring that multiple creditors share equally in repayment priority from the borrower’s assets.. more

Non-Recourse Loan

A non-recourse loan is a type of loan where the lender’s only remedy in case of default is to seize the collateral property; the borrower is not. more

Net Operating Income

Net operating income (NOI) is the total income generated by a property after operating expenses are deducted but before taxes and financing costs.. more

Mechanic's Lien

A mechanic’s lien is a legal claim by a contractor, subcontractor, or supplier for unpaid work or materials provided for a property.. more

Lis Pendens

Lis pendens is a legal notice filed in the land registry indicating that a property is subject to ongoing litigation that may affect its title.. more

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