Credit Scores in Canada: Helpful Tips for Newcomers

Starting life in Canada is exciting – and it may mean learning a few new things about money. One of them is understanding your credit score.
A credit score is a three-digit number from your credit report that shows how you have managed credit. Lenders and businesses refer to it when deciding whether to approve you for different services.

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Typically, this score may be checked:

• When you apply for a credit card
• When you look for a mortgage to buy a home
• When you rent an apartment

Doing the Math: How They Calculate Your Credit Score

Although the exact formula isn’t shared, credit scores are based on details from your credit report. Lenders may see higher scores when credit is managed well, and lower scores when there are missed payments or high debts.^[1]

Key factors that go into calculating your credit score often include:

• Your history of paying bills on time
• The length of time you’ve had credit
• The balances you owe on loans or credit cards
• How close your balances are to the limit
• The number and type of new credit applications
• Records of collections or bankruptcy

In Canada, two main credit bureaus collect the information used to build your credit score: EquifaxⓇ and TransUnionⓇ.^[1] As new details are added to your credit report, your score may change over time.^[2] It’s also worth noting that credit history from your home country, or from another country where you have lived, is generally not carried over to Canada.

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How Canadian Lenders May Review Your Credit History

Lenders in Canada check your credit when you apply for a credit card. To do this, they might:

• Look at your past financial transactions with them
• Review the details you include on your credit application
• Request a credit report from a credit bureau

Credit bureaus gather information from a variety of lenders and create a report that shows your borrowing history. It may be useful to review your own report regularly. This way, you can confirm the details are accurate and address any errors you notice.

What Counts as a Good Score?

Credit scores in Canada usually range from 300 to 900. As a guide:

• A good score: 660–724
• A very good score: 725–759
• An excellent credit rating: 760 and above^[3]

What matters most is how well you are seen to manage credit. Lenders may look at your score as one way to help judge this. A higher score may make it easier to be approved for loans, credit cards, rental housing, or even certain jobs. Your score also changes over time as your credit use and payment history are updated.

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What Affects Your Credit Score?

Credit bureaus such as Equifax® and TransUnion® may consider:

• Credit applications: Making many requests for new credit in a short time may lower your score^[4]
• Length of credit history: The longer you’ve been using credit, the more information there is to assess^[5]
• Credit usage: Using a high percentage of your available credit may be seen as a risk
• Payment record: Paying on time may help, while missed or late payments may reduce your score

Knowing these factors may help you manage credit more thoughtfully and make choices that support your financial journey.

Some Practical Ways to Build Your Credit in Canada

In Canada, small actions over time may add up to stronger credit history. Here are some tips to help you build a positive credit report that lenders may be more likely to approve.

• Get a phone plan and internet services: Many providers check credit when you sign up. Ask if your payments are reported to credit bureaus — regular, on-time payments may support your score.
• Make use of your credit card: Applying for a card and paying what you owe on time may help you establish history. TD includes a newcomer credit card option in the TD New to Canada Banking Package.^[6]
• Be on time with loan and lease payments: Whether it’s for a car, school, or housing, meeting your payment schedule may help you strengthen your credit profile.
• Set and follow a budget: Keeping a clear budget may help ensure you never miss a payment. Tools like the TD App and EasyWeb Online Banking^[7] make it easier to stay on track.

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Why Choose TD?

More than 160 years of helping Canadians:

TD has a proud history of delivering financial solutions to Canadians for more than 160 years. TD also brings a century of experience helping newcomers navigate the unique challenges of the Canadian banking system.

With over a thousand branches, and the ability to also serve you in more than 80 different languages, TD has become one of the largest and most trusted banks in Canada, now serving 16 million Canadians.

TD offers online support and resources of interest to newcomers on topics such as banking basics, moving to Canada, credit score essentials, and more. TD is open longer hours for your convenience and has thousands of ATMs across Canada to help you take care of your everyday banking needs quickly and easily.

Ready to Bank?

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Book an appointment to talk with a TD Personal Banking Associate about the TD New to Canada Banking Package. You can book online right away, or visit the TD website to learn more.

Legal Disclaimer:

Information provided by TD Bank Group and other sources in this article is believed to be accurate and reliable when placed on this site, but we cannot guarantee it is accurate or complete or current at all times. The information in this article is for informational purposes only and is not intended to provide financial, legal, accounting or tax advice, and should not be relied upon in that regard. This information is not to be construed as a solicitation to buy. Products and services of the TD Bank Group are only offered in jurisdictions where they may be lawfully offered for sale. All products and services are subject to the terms of the applicable agreement. The information in this article is subject to change without notice.

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[1] Equifax Canada, How Are Credit Scores Calculated?, Equifax Canada, 2025, https://www.equifax.ca/personal/education/credit-score/articles/-/learn/how-are-credit-scores-calculated/, (accessed 29 September 2025).

[2] Financial Consumer Agency of Canada, Credit Report and Score Basics, Government of Canada, 2025, https://www.canada.ca/en/financial-consumer-agency/services/credit-reports-score/credit-report-score-basics.html, (accessed 29 September 2025).

[3] Equifax Canada, What Is a Good Credit Score?, Equifax Canada, 2025, https://www.equifax.ca/personal/education/credit-score/articles/-/learn/what-is-a-good-credit-score/, (accessed 29 September 2025).

[4] Financial Consumer Agency of Canada, Improve Your Credit Score, Government of Canada, 2025, https://www.canada.ca/en/financial-consumer-agency/services/credit-reports-score/improve-credit-score.html#toc4, (accessed 29 September 2025).

[5] Equifax Canada, How Are Credit Scores Calculated?, Equifax Canada, 2025, https://www.equifax.ca/personal/education/credit-score/articles/-/learn/how-are-credit-scores-calculated/, (accessed 29 September 2025).

[6] TD Canada Trust, Banking Offers for Newcomers, Toronto, TD Bank Group, 2025, https://www.td.com/ca/en/personal-banking/products/banking-offers-for-newcomers, (accessed 29 September 2025).

[7] TD Canada Trust, Ways to Bank, Toronto, TD Bank Group, 2025, https://www.td.com/ca/en/personal-banking/solutions/ways-to-bank?#tab4, (accessed 29 September 2025).