Credit Score FAQs

What is a Credit Score?

A credit score is a three-digit number that a service, like Equifax, assigns.  It represents their opinion of whether or not you are a good credit risk.  In other words, if someone lends you money, how likely is the lender to get their money back?

What Makes up the Score?

The services look at many factors, but the top ones are:

  • On-time payments versus late or missing payments
  • Outstanding balances and the amount of remaining credit available
  • Number and types of credit accounts, i.e. credit cards, auto loans, etc.
  • How many new accounts have been established, including outstanding applications, especially recently
  • How long has the account been in use, and how long has money been owed?

So, it comes down to payment history, length of credit history, and how responsibly you have used the funds.

Can I Improve My Credit?

Each person’s situation is different.  There are some actions you can take to clear up discrepancies and to improve your credit going forward.  Discuss your details with an expert at a service like, who will be able to give you advice and action items.

What is Considered a Good Score?

Anything above 760 is excellent.  If you are in the 600 to 724 range, you are still pretty okay.  Anything lower and you will encounter some difficulty.

While you don’t need to be perfect to get a loan, there are many options for either a personal loan or applying for a mortgage for home ownership.  There is no magic number or only one lender.  Each lender has criteria and terms, and your credit score is only one of the evaluation points.

Times are Tough.  How can I Protect my Score?

  • Budget!  – List all of your debt payments like student loans, lines of credit, mortgages, etc.  If you are concerned that any variable interest rates will strain your finances, talk with a counsellor.  Many companies, including online services like, offer consultations about debt consolidation or strategies to reduce your risk.

The Financial Consumer Agency of Canada offers a budget planner.  Look for ways to cut back, including eliminating the fancy coffees, declining an evening out at the pub, or using coupons for groceries. 

  • Payments – Make at least the minimum payment each time.  Pay more on the balance as your finances permit.  Pay on time; late payments affect your score and can eat into your pocketbook.
  • Reports – Check your credit reports regularly.  Watch your balances and keep them below the limit. 

Final Words

No two people take the same financial journey.  Knowledge and action are both associated with the best plans for your future. Don’t waste time or be worried about asking for help. has professionals ready to answer your questions or offer suggestions.  They are non-judgmental and genuinely concerned about helping you understand your finances and, when the time is right, helping you find the best lenders.