Moving out on your own, financing a car or landing your dream job often depends on having a solid credit score. A credit score reflects how trustworthy you appear to lenders and typically ranges from 300 to 900. Lenders, insurers, landlords and sometimes employers use that number to assess your financial reliability.
A strong credit score—generally in the high 600s to mid 700s—can make it easier to qualify for a mortgage, a car loan or favorable insurance rates, and it can help you secure lower interest rates. Because some landlords and employers may review your credit information before offering a rental or a job, it’s important to understand how credit scoring works and what you can do to build and maintain a healthy score.
Factors that impact your credit score
Several elements combine to determine your credit score. Young adults generally have lower scores than older Canadians because credit history builds over time. For example, a 2018 study by Equifax Canada found that Canadians aged 18 to 25 had an average score of 692, slightly lower than other age groups. The good news is that credit scores tend to improve as people establish steady financial habits.
- Credit history: The length of your credit history matters. Lenders prefer to see a track record showing you can responsibly manage credit over time. Closing older accounts can shorten your visible history and may reduce your score, so keep long-standing accounts open if they are in good standing.
- Debt-to-credit ratio: Also called credit utilization, this is the percentage of available revolving credit you are using. It includes credit cards and lines of credit relative to your total credit limit. Keeping utilization at 30% or less is a common guideline; consistently maxing out credit can signal higher risk to lenders.
- Payment history: Timely payments are critical. Missing a payment by 30 days or more typically leads lenders to report the delinquency to credit bureaus, which can harm your score. Even one late payment can have a meaningful negative impact.
- Credit inquiries: When you apply for new credit, lenders perform a credit check. Multiple hard inquiries in a short period can make it appear as though you are taking on more debt than you can handle. If you are rate-shopping for a mortgage, loan or credit card, try to keep those applications within a short window so inquiries are treated as a single search by scoring models.
- Types of credit: A mix of credit types—such as credit cards, a car loan, a line of credit or a mortgage—can demonstrate your ability to manage different obligations. That said, only take on credit you can repay; unnecessary debt harms your financial stability and your score.
How to work toward a 900 credit score in Canada
Achieving the highest possible score is a long-term process that requires consistent, responsible financial behaviour. The following steps outline practical actions you can take to build a strong credit profile.
- Check your credit reports regularly: Obtain your credit reports and scores from both major credit bureaus and review them for accuracy. Each bureau may have different information and scoring models, so checking both helps you spot discrepancies. If you find errors or unfamiliar accounts, contact the bureau to request corrections and investigate potential identity theft.
- Use a variety of credit responsibly: Start with a credit card to establish a history, then responsibly add other types of credit over time. Making regular payments on student loans, a car loan or a line of credit shows lenders you can manage different kinds of debt.
- Make rent payments count: Historically, monthly rent payments were not reported to credit bureaus, but third-party services and reporting options now allow tenants to have their rent history included in their credit files. If you consistently pay rent on time, look into reporting options that can help those payments strengthen your credit record.
- Limit new credit applications: Opening several credit accounts at once can be interpreted as financial stress or risk. Aim to keep the number of open credit cards and new accounts to a reasonable level—many experts suggest two to three cards alongside other credit types—so you can manage payments easily and maintain low utilization.
- Pay bills on time and in full when possible: Your payment history is one of the most influential factors in your score. Always try to pay balances in full each month. If circumstances prevent full payment, at least make the minimum payment by the due date to avoid late reports. Setting up automatic payments or calendar reminders can prevent missed payments.
Why a good credit score matters
Building a solid credit score takes time, especially for students and those just starting their careers. Small, consistent habits—like paying your credit card and phone bill on time and reducing outstanding debt—will gradually strengthen your credit profile. Over the long term, a higher score can translate into lower interest rates, easier approval for loans and rentals, and improved financial opportunities.
Even if your score isn’t where you want it to be today, steady progress and responsible money management will improve it. Focus on accuracy in your credit reports, timely payments, keeping utilization low and maintaining a sensible mix of credit. Those practices create a reliable credit history that lenders and other decision-makers can trust.
Additional resources
- How to afford moving out as a student or young adult
- How to manage money as a student
- How to invest as a young person
- Six money lessons many wish they knew in their twenties