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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

Back-End Ratio

The back-end ratio, or debt-to-income ratio, measures the percentage of a borrower’s gross monthly income spent on total monthly debt obligations,. more

Airspace Rights

Airspace rights are the legal rights to control, use, or sell the space above a parcel of land, separate from the ownership of the land itself.. more

Absorption Rate Analysis

Absorption rate analysis is the evaluation of how quickly available properties in a given market are being sold or leased during a specific time period.. more

Vacancy Rate

The vacancy rate is the percentage of all available rental units in a property or market that are unoccupied at a given time.. more

Sustainability

Sustainability in real estate refers to designing, constructing, and operating properties in ways that minimize environmental impact, support social. more

Soft Costs

Soft costs are the indirect expenses incurred in a construction project that are not directly tied to physical building materials or labour.. more

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