Credit scores in Canada range from 300 to 900 and are used by lenders to predict the likelihood of consumers paying their bills on time.Andrew Vaughan/The Canadian Press
It wasn’t until Greg Fjell’s bank started offering free credit-score information online in 2017 that he realized he had a perfect 900.
“I was surprised it was as high as it was because I didn’t do anything specific to raise it,” says Mr. Fjell, 40, who lives and works in Edmonton.
It’s likely what he did do – always paying his credit card statements in full and on time, and never being late on a telephone or utility bill – that led to the top-tier score with TransUnion, one of Canada’s two main credit bureaus alongside Equifax.
Mr. Fjell didn’t realize that 900 was rare until he saw people on social media and in niche financial-nerd circles talking about and comparing credit scores with friends. He also received kudos from lenders when applying for credit cards, getting rental applications approved and eventually applying for a mortgage.
His TransUnion score has dipped below 900 since then, including when he opened and closed a few credit card accounts during the pandemic, but now it has returned to that highest three-digit financial grade.
“It’s like a security blanket. I did feel a little less comfortable when it went down,” Mr. Fjell says.
While a perfect 900 comes with bragging rights, the credit bureaus say it’s not necessary in order to qualify for loans and obtain lower interest rates.
“You don’t need a perfect score to enjoy the benefits of great credit,” says Matt Fabian, director of financial services research and consulting at TransUnion, adding that anything above 800 is “extremely good.”
Credit scores in Canada range from 300 to 900 and are used by lenders to predict the likelihood of consumers paying their bills on time. They’re calculated based on factors such as the type and amount of available credit, the amount you owe, how many products you have and your payment history.
Stress Test podcast: Everything you need to know about credit scores
About 1 per cent of Canadians have a perfect score with TransUnion, according to Mr. Fabian.
Most Canadian scores fall between 700 and 900 and can vary between TransUnion and Equifax because each uses different weightings in its proprietary rankings. In Mr. Fjell’s case, his Equifax score has always been lower, currently sitting around 836, but is still considered “excellent” by credit bureau standards.
Julie Kuzmic, senior compliance officer, consumer advocacy at Equifax, says credit bureau scores have always varied but consumers have only started to notice and compare them since they became more widely available for free.
“It seems to be contributing to a lot of confusion around credit bureaus,” she says, noting that banks often look at what range a score is in, not the number itself. For instance, at one bank, a score between 725 and 759 may be considered “good” and 760 and above is “excellent,” while at another bank, 701 to 800 might be good and anything at or over 801 might be “excellent.”
While most people refer to their credit score, it’s actually credit scores (plural) that credit bureau companies compile for lenders, says Ms. Kuzmic.
She says lenders then purchase a particular credit score version to assess consumers’ creditworthiness. For example, a major bank might use the same version for all applicants for credit cards, mortgage applications and lines of credit, while another bank might use a different one.
“They each apply their own interpretation rules to the scores they use,” Ms. Kuzmic says.
Ms. Kuzmic notes that credit scores are only one factor in a lender’s decision when evaluating a loan application. Others include income, employment status, loans and bank balances.
Both credit bureaus say factors that can influence higher credit scores include making payments on time, maintaining a low credit-utilization ratio (the percentage of available credit that you’re using on your credit cards and other lines of credit), having a long credit history and a diverse credit mix and minimizing so-called “hard” credit checks, which are formal requests for your credit report when you apply for a credit card, car loan or mortgage.
And while having a higher credit score is something to be proud of, Ms. Kuzmic says scores - high or low - aren’t a moral judgment.
“I know it may seem obvious, but there are always people who need to hear that,” she says. “At Equifax, we don’t look at people with a low credit score and judge them. Bad things can happen to good people… They can go through rough times and even declare bankruptcy yet rebuild and end up with a fantastic, solid credit history to support them.”
There are many ways to find out your credit card score for free, either through the two credit agencies, your bank or apps such as Borrowell or Mogo. Experts suggest checking it every few years to make sure the information is correct.
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