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

Sales-To-New-Listings Ratio (SNLR)

The Sales-To-New-Listings Ratio (SNLR) is a real estate metric that compares the number of homes sold to the number of new listings in a given period.. more

Market Type

Market type refers to the classification of a real estate market based on supply, demand, and pricing trends, typically categorized as buyer’s,. more

Outparcels

Outparcels are stand-alone commercial properties located near or on the outer edge of a larger retail or shopping centre complex.. more

Halo Effect

The halo effect in real estate refers to the positive influence that a popular or high-end development has on the surrounding property values and. more

Sump Pump

A sump pump is a mechanical device installed in the lowest part of a basement or crawl space to remove accumulated water and prevent flooding.. more

Structural Integrity

Structural integrity refers to a building’s ability to withstand its intended loads without failure, deformation, or collapse during its lifecycle.. more

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