Equifax and TransUnion score Canadian borrowers from 300 to 900; on-time payments and card use below 30% of the limit carry the most weight.
Credit scores in Canada run from 300 to 900, and the number comes from one of two national bureaus, Equifax and TransUnion. The higher the number, the more creditworthy the borrower looks to a lender. Both keep a file on each borrower, tracking credit cards and loan payments. They start from the same factors and weigh them differently, so the score can differ between bureaus for the same borrower.
Paying on time and keeping balances low are two of the biggest factors, according to Canada's Financial Consumer Agency. A longer repayment history helps as well, because it gives lenders a fuller record of how a borrower handles debt.
The same steps apply to a newcomer with no file and a borrower repairing a low score.
A basic chequing account does not factor into a credit report. Its role is indirect: it builds the money management habits that later show up in a credit history, and it gives a place to deposit funds and make payments.
The first real credit product is the credit card. A lender may approve an unsecured card with a set limit, or a secured card backed by a deposit that becomes the limit. Either type starts a file as long as the issuer reports payments to a bureau. Cards that do not report build nothing.
Maxing out the card damages the score it is meant to build. MoneySense's guide to Canadian credit treats heavy card use as a sign the borrower is stretched for funds. Its working target is utilization below 30% of the limit.
Every payment on a card gets reported to a bureau. Card issuers file each one to Equifax or TransUnion, and the bureaus record the pattern. Steady payments, the guide says, rank second among credit-building factors, behind paying on time.
A paid-off card is not a card to cancel. Account age counts, and closing a card held for years removes an important stretch of history from the file; the risk is highest for the oldest accounts. The guide recommends leaving the account open even if it sits unused.
Consumers can pull their score free from Equifax and TransUnion, and see whether a file exists at all. MoneySense advises reading through the report several times a year and disputing errors before they damage the score.
TransUnion trades on the NYSE under TRU. AlphaScala lists the shares on its TRU stock page as Unscored, with no Alpha Score assigned.
Students and newcomers can build a file with these steps. Other credit-building products exist; they are less readily available.
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