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How Does My Credit Score Affect My Mortgage Rate?


A credit score helps lenders determine their risk in lending you money. Your history of paying bills on time and your monthly debts determine your credit score, which can range from 300 (worst) to 900 (best). A score of 720 or above is generally considered “excellent.”


There are two Canadian credit bureaus (Equifax and TransUnion) that maintain credit reports. Usually, the two scores are similar, but they may differ based on the different information collected by each credit bureau.


Finding out your credit score:


For a fee, Equifax and TransUnion will provide you with your credit score(s) upon request. You can also get one free copy of your credit reports from each credit bureau every 12 months via and You’re allowed to dispute information in the reports if it was recorded incorrectly, so it’s a good idea to check your credit reports regularly for errors – especially if you’re planning a major purchase like a house.



Maintaining good credit:


Paying your bills on time as a matter of habit is the best way to ensure your credit remains healthy. Many creditors report after 30 days past due, while others wait as long as 60 days.



What’s in my credit report?


Debts such as credit cards, auto loans, student and personal loans automatically show up in your credit reports. Creditors decide whether or not to report late payment. If you’re late, you can call the organization to ask about their policies and whether your payment was reported.



A word of caution:


Each time you apply for a loan or credit card, it gets reported to the credit bureaus. When lenders see multiple applications reported in a short period of time, it can discourage them from giving you a loan or credit facility.



How important is my credit score?


Your credit score is very important but it is only one factor in a mortgage application. Lenders also consider your income, employment history, your current monthly debts, the size of the loan and your down payment. If your credit score isn’t where you want it to be, you can improve it over time.

Trying our Home Affordability Calculator, talking to a mortgage broker, and mortgage prequalification are a few ways to start assessing your borrowing power.



What credit score do I need to get a mortgage?


You need minimum credit score of 640 which is required for a mortgage by most lenders when you apply for a high ratio mortgage, it’s important to maximize your score before starting the home-buying process in order to qualify and secure the best mortgage rate. Ideally you should have over 680 credit score for high ratio and over 650 for conventional mortgages.

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