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Essential Tips on how to Maintain a Good Credit Score

What is a credit score?

Your credit score is a number assigned to you by Canadian credit bureaus.

To potential lenders, this number can be utilized to make lending decisions. A higher credit score is typically looked upon more favorably by potential lenders.

You can monitor your credit score with our free credit score check, at Equifax, or with TransUnion.

What is a good credit score?

There is no one size fits all for credit score ranges as they differ based on different credit scoring models. However, below is an estimate that can provide a good understanding of the credit score ranges from Equifax1:

  • 800 to 850: Excellent

    An illustration showing that credit scores between the range 800 to 850 is considered Excellent.

    Those in this range are considered as low-risk borrowers who may have an easier time securing new credit.

  • 740 to 799: Very good

    An illustration showing that credit scores between the range 740 to 799 is considered Very Good.

    Those in this range typically have a history of good credit behavior and may have an easier time with credit approval.

  • 670 to 739: Good

    An illustration showing that credit scores between the range 670 to 739 is considered Good.

    People in this range are considered as lower-risk borrowers and can qualify for most credit products.

  • 580 to 669: Fair

    An illustration showing that credit scores between the range 580 to 669 is considered Fair.

    Those in this category are considered higher-risk individuals and may have some credit history issues thus making it more difficult qualifying for new credit.

How is a credit score determined?

Credit scores are measured on several factors, including your credit mix and how well you manage a mix of credit, balances, payments, etc., as well as how often you apply for lines of credit, credit cards, loans, and other financial products.
Based on Equifax, other factors include2 :

  1. Payment history ~ 35%:
    This measures your payment history with credit cards, loans, lines of credit, etc. and whether they are paid on time, late, or if there have been missed payments.

  2. Used credit vs. available credit ~ 30%:
    This shows how you manage credit through the average balance you carry on credit cards/lines of credit.

  3. Length of your credit history ~ 15%:
    This examines your credit history, such as the oldest and more recent credit accounts, and your experience with loans over time. This shows lenders your overall handling of credit over a certain period of time.

  1. Public records ~ 10%:
    This shows if you’ve previously filed for bankruptcy, had issues with collections or credit departments, which can determine your risk to potential lenders.

  2. Number of inquiries into your credit file ~ 10%:
    This shows how often your credit is reviewed for loan or credit applications. While a large number of inquiries can be a signal of credit distress, not all of these typically reflect badly on your overall score.

How to build & maintain a good credit score3

  • Be consistent and timely with your payments:
    Paying more than the minimum amount for your bills, loans and credit cards in a timely manner can help in maintaining a good credit score. Setting up pre-authorized payments can really help you stay on track.
  • Avoid applying for credit too often:
    If you apply for credit cards, loans, lines of credit or other forms of credit too often, these can be an indicator of poor money management skills and can potentially lower your credit score.
  • Using credit wisely to establish good credit history:
    The longer you demonstrate responsible use of credit cards and other revolving credit, the better you look to potential lenders. This is a good way to establish and maintain a good credit rating.
  • Avoid using credit to pay off credit:
    Using one credit source to pay off another credit debt can show financial disarray. For example: opening a line of credit to pay your credit card can have a negative effect on your credit score.
    Check out TD's debt consolidation resources to manage your debt.

Frequently Asked Questions

As a student, it’s likely you’re new to credit scores and haven’t yet established a credit history. The average score for people between the ages of 18 to 25 is 6924. Use this as your base to see how you’re doing in building your credit history and scores.

When credit bureaus are calculating your credit score, the biggest factor they look at is payment history. 

Government student loans don’t require you to start repayment until six months post-graduation. After that, you must begin your payments in a timely manner to maintain a good credit score. 

Private student lines of credit come with various repayment options; however, you’ll have to start repayment (interest only) on your outstanding balance even while you are still attending school. 

Student credit cards can help you build a good credit history while you are in school if your payments are made on time and your credit utilization is within the best practices limit (30%). Late and missed payments can negatively affect your credit score.

It’s advisable to check your personal credit report from time to time to track how you’re doing in building your overall credit score. 

You can check your credit report at5:

Equifax Canada
1-800-465-7166
consumer.relations@equifax.ca

Trans-Union Canada
1-877-713-3393
(Quebec only),

1-800-663-9980
(All other provinces),
marketing@tuc.ca

Here are a few tips to develop a good credit score as a student6 :

Get the right type of loan :

For students, getting the right type of loan can have a big effect on how you manage your credit. These usually include a student credit card, student loans, personal loans, and Student lines of credit.

Pay your balances on time all the time, at least the minimum:

This is debt-management 101. Paying your credit and loan balances on time each month is the best way to build and maintain your credit in good standing. If you’re unable to pay off your credit card in full each month, make sure you pay the minimum. Failure to do so can adversely affect your credit score.

Don’t hit your credit limit :

Simply put, maxing your credit card can negatively impact your credit score.

Ideally, you want to keep your balance below 30% of your available credit. Following the 30% rule will go a long way to keeping your credit score higher.

Track your credit score :

Keeping regular tabs on your credit report and credit score is a good way to help you stay on track. Equifax and TransUnion are the most widely used credit bureaus to check your overall credit evaluation.

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