Your Credit Score and Your Mortgage: What Lenders Actually Look At

Most first-time buyers meet their credit file for the first time in a mortgage broker's office, which is the worst possible timing. The score itself is one input into a lending decision, and the report underneath it is what a lender actually reads.

The score is a summary, not the file

Credit scores in Canada usually range from 300 to 900, and a higher score is better. That range comes from the Financial Consumer Agency of Canada.

The number compresses a much longer document. Your credit report lists the accounts you hold, the limits on them, the balances you carry, and whether you have paid on time. A lender assessing a mortgage application reads that document. The score is the headline on it.

This matters because two files can produce similar scores for different reasons, and a lender reading the detail will treat them differently. Ask your broker what the file itself shows rather than stopping at the number.

There is no single score

Canada has two credit bureaus, Equifax and TransUnion. They hold separate files on you.

The Financial Consumer Agency of Canada notes that the bureaus use different formulas and do not disclose exactly how they calculate. That has a practical consequence: your score is not one number, and a problem can sit on one bureau's file and not the other's.

Pull both. Buyers who check one bureau and stop sometimes discover the issue later, when a lender pulls the other one.

What the agency lists as influences

The Financial Consumer Agency of Canada groups the influences into two sets.

On credit history: how long you have used credit, the age of your accounts, the types of credit you hold, whether a collection agency has been involved, and any insolvency or bankruptcy history.

On credit habits: whether you carry balances on cards, whether you pay on time, how much you owe in total, how close you sit to your limits, and how often you apply for new credit.

That last item is the one buyers trip over. A run of credit applications in the months before a mortgage application is visible on the file.

The timing point, which is the useful one

Give yourself months rather than weeks.

Everything you might want to fix takes time to show up. A disputed error has to work through the bureau's correction process and then appear on the file a lender pulls. A balance paid down takes a billing cycle or two to report. Neither happens in the week before you write an offer.

In our experience, the buyers who look at their credit file early have room to act on what they find. The ones who look at pre-approval are reacting to it. If you are a year out from buying, this is the cheapest piece of homework available, and our pre-approval guide covers what happens next.

What to do when you find an error

Both bureaus run a dispute process for correcting mistakes on a file.

Start it as soon as you find the problem. Account errors, balances that were paid but still show as owing, and accounts that are not yours all come up. The correction has to go through the bureau and then reach the version of the file a lender sees, and that sequence takes time.

Keep your own records of what you disputed and when.

The score and the ratios are separate questions

A car payment, a student loan payment, and a line of credit payment are monthly obligations. Monthly obligations feed the debt service ratios lenders use to size a mortgage, which our GDS and TDS guide covers in detail.

That is a different question from what those accounts do to your score. A loan paid perfectly on time supports a payment history and still consumes borrowing room.

Buyers sometimes ask whether to pay off a car loan before applying. There is no general answer, because it depends on the balance, the payment, and what the cash would otherwise be doing as a down payment. Your mortgage broker can model both and tell you which one produces a better outcome for your file. That conversation is one of the reasons our broker versus bank guide suggests talking to someone who can see more than one lender's rules.

Closing accounts is not automatically helpful

The length of your credit history and the age of your accounts both appear on the agency's list of influences.

Closing an old card removes that history. Paying a balance down and closing the account are separate decisions, and people often do both at once assuming they help equally.

Ask your broker before closing anything while an application is in progress. The same applies to opening anything, which brings up the last point.

Do not change anything between application and completion

Lenders can re-check a file before funding.

A new car loan, a new card, or a large purchase on credit between your approval and your completion date can create a problem at the worst point in the transaction. Our closing timeline walks through that window, and the short version is that it is not the time to take on a new obligation.

Furniture for the new place can wait until the keys are in your hand. This comes up more often than it should.

If you are buying with someone else

Two people applying together bring two credit files.

The Financial Consumer Agency of Canada sets out that a joint borrower becomes equally responsible for repaying the unpaid balance on the borrowed amount, and that every joint borrower has the right to receive the statements and cost disclosures the other borrowers receive.

Have the conversation about both files before you sit down with a broker. It is an awkward discussion to have for the first time in front of a third party, and our co-buying guide covers the wider set of questions two buyers should settle in advance.

The short version

Pull both bureau files, months before you plan to apply. Read the report rather than the score alone. Correct errors early, because the correction takes time to appear.

Pay attention to the habits the agency lists, particularly balances relative to limits and how often you apply for new credit. Ask your broker before closing accounts or opening them, and change nothing between approval and completion.

We are agents rather than mortgage professionals or credit counsellors, and none of this is lending advice. A licensed mortgage broker and the credit bureaus themselves are the right sources for your specific file.

Key takeaways

• Credit scores in Canada usually run from 300 to 900, and a higher score is better.
• Equifax and TransUnion hold separate files with different formulas, so pull both.
• The lender reads the report, and the score is a summary of it.
• Corrections and paid-down balances take weeks to appear, so check your file months before applying.
• Do not open or close credit accounts between mortgage approval and completion without asking your broker.

Frequently Asked Questions

What is the range of a credit score in Canada?

Credit scores in Canada usually range from 300 to 900, and a higher score is better, according to the Financial Consumer Agency of Canada. The score is a summary of your credit report, which lists your accounts, limits, balances, and payment history. A mortgage lender reads that report in full. Each lender sets its own cutoffs within the 300 to 900 range, and those cutoffs vary by lender and by mortgage product, so ask your broker what applies to your file.

Who keeps my credit report in Canada?

Two credit bureaus keep credit reports in Canada: Equifax and TransUnion. Each one holds a separate file on you. The Financial Consumer Agency of Canada notes that the bureaus use different formulas and do not disclose exactly how they calculate a score, so you have two scores, and they can differ. An error or a missed payment can appear on one file only. Pull both reports before you meet a mortgage broker, because a lender may pull either one.

What goes into a credit score?

The Financial Consumer Agency of Canada lists how long you have used credit, the age of your accounts, the types of credit you hold, any collections or insolvency history, whether you carry balances, whether you pay on time, how much you owe in total, how close you sit to your limits, and how often you apply for new credit.

Does checking my own credit report lower my score?

Checking your own report is a different kind of inquiry than a lender pulling your file to assess an application. Frequent applications for new credit are listed by the Financial Consumer Agency of Canada as something that affects a score. Reviewing your own file is how you find errors.

How far ahead should I look at my credit before buying?

Give yourself months rather than weeks. Correcting an error on a credit file takes time through the bureau's dispute process, and paying a balance down takes a billing cycle or two to show up. In our experience the buyers who look early have room to act and the ones who look at pre-approval do not.

Does a lender look at anything besides the score?

Yes. A mortgage lender reads the full credit report behind the score, which shows your accounts, balances, limits, and payment history. The lender also assesses your income, your employment, your down payment, and the debt service ratios lenders use to size a mortgage. Two credit files can produce similar scores for different reasons, and a lender reading the detail will treat them differently. The score is one input among several in the lending decision.

Will paying off a credit card and closing it help?

Paying a balance down and closing the account are separate decisions with different effects. The length of your credit history and the age of your accounts both appear on the Financial Consumer Agency of Canada's list, so closing an old account removes history. Ask your mortgage broker before closing anything while an application is in progress.

What if there is a mistake on my credit report?

Both credit bureaus, Equifax and TransUnion, run a dispute process for correcting mistakes on a credit report. Common errors include accounts that are not yours and balances that were paid but still show as owing. Start the dispute as soon as you find the problem. The bureau has to process the correction, and the corrected file then has to reach the version a lender pulls, and both steps take time. Keep your own record of what you disputed and when.

Does a car loan hurt my mortgage application?

A car payment is a monthly obligation, and monthly obligations feed the debt service ratios lenders use to size a mortgage. That is separate from what the loan does to your score. A loan paid on time supports a payment history and still consumes borrowing room.

Should I avoid applying for anything before completion?

Yes. Talk to your mortgage broker before you take on any new credit between your mortgage application and your completion date. Lenders can re-check a file before funding. A new car loan, a new credit card, or a large purchase on credit that appears on the file late in the process can create a problem just before completion. Furniture and other purchases for the new home can wait until after completion day. Our closing timeline guide walks through that period week by week.

Sources

• Credit report and score basics, Financial Consumer Agency of Canada
• Disclosure of information to joint borrowers, Financial Consumer Agency of Canada

Verified September 12, 2026. General information only, not lending or credit advice. Lender criteria vary. Consult a licensed mortgage professional about your own file.

Related FRIVE guides

• Pre-approval vs approval, what a lender commits to and when
• GDS and TDS ratios, how monthly obligations size a mortgage
• Mortgage broker vs bank, who can see more than one lender's rules
• Closing timeline week by week, the window where nothing should change
• Co-buying in BC, when two credit files are involved

Next Steps: Work with FRIVE

The buyers who have the easiest financing conversations are the ones who looked at their credit file a year before they started touring. It is free, it takes an afternoon, and it is the only piece of mortgage homework you can do entirely on your own.

If you are somewhere in that year, start a conversation with the FRIVE team or browse current Fraser Valley listings to see what your range actually buys.