How Credit Scores Work in Canada: Equifax vs. TransUnion
Two Bureaus, Similar Methods
Equifax and TransUnion both maintain your credit file, but reported accounts and scores can differ slightly. Lenders may pull one or both, so monitor each. Scores update as creditors report new balances and payments.
Key Factors Explained
- Payment history: the most important—never miss due dates.
- Utilization: aim below 30% on revolving accounts.
- Length of history: older accounts help; avoid closing your first card.
- New credit: too many recent inquiries can drag the score.
- Mix: revolving and installment accounts show diversified experience.
Free Monitoring and Reports
Use reputable services for free score previews and set alerts for balance spikes or new inquiries. Obtain full reports periodically from both bureaus to verify accuracy and spot fraud.
Disputes and Corrections
If you find an error—like a paid account still marked delinquent—file disputes with the bureau and the lender. Provide documentation (statements, confirmation numbers), and follow up until corrected.
Preparing for a Major Loan
Three months before applying for a mortgage or auto loan, pay down revolving balances, avoid new credit, and confirm that all accounts report on time. A small utilization drop can meaningfully improve pricing.
Bottom Line
Know how each bureau sees you, keep balances low, and protect your file—your score will reward consistent, predictable behaviour.