MORTGAGE BASICS · EXPLAINED
What credit score do you actually need for a mortgage in Canada?
There is no single national minimum. What exists instead is a set of tiers — and the honest answer is that your score doesn't decide whether you can buy a home, it decides which tier of lender you start in and what that costs you. People get financed at 780 and they get financed at 520. The difference is the rate, the fees, and the plan.
Educational only — not personalized financial advice. Lender policies change and your own file matters. That's the conversation to have with Rahul.
Three lender tiers, three different thresholds
"Minimum credit score for a mortgage" is the wrong question, because it assumes one lender. Canada has three broad tiers, and each one draws its line in a different place.
680+ ideal · 600 hard floor
Banks, credit unions, and monoline lenders — the tier behind most insured and best-rate mortgages in Canada.
- Generally want 680 or higher for the best rates and the smoothest approval
- 600 is the hard floor for an insured (high-ratio) mortgage — below that, default insurance is not available
- Between 600 and 679 approval is still possible, but the list of willing lenders gets shorter
- Income documentation and debt ratios are held to the strictest standard of any tier
High 500s – 600s
Alternative lenders built for files that are strong in most ways but don't fit an A-lender's box.
- Typically work with scores in the high 500s through the 600s
- Rate is higher than an A-lender, and there is often a lender fee on top
- More flexible on bruised credit, self-employed income, and recent credit events
- Usually a stepping stone — a two- or three-year term while the file gets repaired, then a move back to an A-lender
Score matters far less
Individuals and mortgage investment corporations lending primarily against the property's equity.
- Credit score carries far less weight — the equity in the property is the main security
- Even a 450–550 score can still get financed if there's meaningful equity
- Meaningfully higher rate, plus lender and broker fees, and usually a short one-year term
- A bridge, not a destination — the plan should always include an exit back to a B- or A-lender
Where your number actually puts you
750+
Excellent
Every A-lender is open to you, and you're in line for the best posted and discounted rates. Credit is simply not the constraint on your file — income and down payment are.
Pre-approval vs pre-qualification680 – 749
Good
Full A-lender access. This is the threshold most lenders and insurers use for their best pricing tier. Almost nothing about your credit will slow the file down.
Pre-approval vs pre-qualification600 – 679
Fair
An A-lender is still possible — 600 clears the insured minimum — but the list of lenders narrows and the rate discount shrinks. Some files land better with a B-lender for one term.
See the rebuild roadmapBelow 600
Needs work — still financeable
Insured A-lender financing is off the table, but B-lenders and private lenders absolutely still do these deals. Past bankruptcy or consumer proposal falls here too, and it is far from a dead end.
Bad credit mortgagesIf a past bankruptcy or consumer proposal is what's sitting on your report, that has its own path and its own timelines — here's how mortgages work after bankruptcy or a consumer proposal.
Equifax & TransUnion
What actually makes up your score in Canada
Canada has two credit bureaus, and lenders don't all pull the same one. The exact formulas are proprietary, but the ingredients are well understood:
Payment history
The single biggest factor. Whether you pay on time, every time. One 30-day late payment on a credit card does more damage than most people expect, and it lingers.
Credit utilization
How much of your available revolving credit you're actually using. Carrying $4,700 on a $5,000 limit reads as strain, even if you never miss a payment.
Length of credit history
How long your accounts have been open. An old card with a small limit is often worth more to your score than a new one with a big limit — closing it can hurt.
Credit mix
A blend of revolving credit (cards, lines of credit) and installment credit (car loan, student loan) demonstrates more than one kind of repayment behaviour.
New inquiries
Hard pulls from new applications. A few over a couple of years is normal. Several in one month reads as someone urgently seeking credit.
Things that hurt more than people think
Maxed-out cards, even when paid on time
Utilization is scored independently of payment history. A card sitting at 95% of its limit can cost you real points every single month, no matter how perfect your payment record is. Paying it down below 30% is often the fastest score improvement available to anyone.
Too many hard inquiries in a short window
Furniture financing, a new phone plan, a car loan pre-approval, and two credit card applications in one season all stack up. Each is small; together they can shift you across a lender's threshold at exactly the wrong time.
Cosigning someone else's debt
A cosigned loan appears on your bureau as your debt, in full. It counts against your debt-service ratios and, if the primary borrower is late, their late payment lands on your report. Plenty of parents discover this while trying to qualify for their own mortgage.
The 90-day version
What actually helps before you apply
- Pay revolving balances down below 30% of each limit — this is usually the single highest-impact move, and it can register within one or two statement cycles
- Don't open new credit in the three to six months before you apply — no new cards, no financed furniture, no car loan
- Don't close your oldest credit card, even if you never use it — its age is helping you
- Pull your own report from Equifax and TransUnion (free, and a soft check that can't hurt your score) and dispute any errors you find — wrong balances and accounts that aren't yours are more common than people assume
- Keep every account current through the entire mortgage process, not just up to application — lenders re-check before funding
If your score needs more than a tune-up, there's a structured version of this — the rebuild roadmap walks through getting from a declined file to an approvable one.
Your score is one input, not the verdict
A high score doesn't approve you on its own
An 800 score with unprovable income or debt ratios past the limit still gets declined. Lenders underwrite the whole file: income, down payment, debt servicing, the property, and the score together.
A low score doesn't decline you on its own
A 570 score with strong verifiable income, a real down payment, and a clean recent twelve months is a very workable file — it just needs the right lender rather than the first one.
Common questions
Does checking my own credit score hurt it?
No. Checking your own report is a soft inquiry, and soft inquiries never affect your score — you can look as often as you like. Only a hard credit pull, where a lender or creditor requests your bureau as part of an application, has any impact. Both Equifax and TransUnion let Canadians access their own report and score for free.
How many points does a mortgage application cost me?
Typically just a few points, and the effect is temporary — usually recovering within a few months. Multiple mortgage inquiries within a short shopping window are generally treated as a single event rather than several separate applications, so working with one broker who shops several lenders is far gentler on your bureau than applying at five banks yourself.
Can I get a mortgage with no credit history at all?
Yes, in some cases. Newcomers to Canada have specific programs built exactly for this — lenders will use alternative proof such as an international bureau, rent and utility payment history, or a larger down payment instead of a Canadian score. See the new to Canada mortgage page for how those programs work.
Does paying off a collection improve my score right away?
Often yes — the balance drops off and the score reacts, sometimes within a cycle or two. But the record of the collection can still appear on your report for a period afterward, and lenders differ in how much weight they put on a paid versus unpaid collection. Ask your broker how a specific lender treats it before you assume it's a non-issue.
Is a 650 credit score good enough to buy a home?
Often yes — 650 clears the insured-mortgage floor and many A-lenders will still approve, assuming income and debt ratios work. What narrows below 680 is your options: fewer lenders, less rate discount, and less tolerance for anything else unusual in the file. It's approvable, it just costs a bit more flexibility.
Newcomer with no Canadian bureau yet? That's a different set of programs entirely — see the new to Canada mortgage options.
What Rahul actually looks at with you
A score is a three-digit summary of a much longer story. Here's what gets reviewed before anyone decides what tier your file belongs in:
- Which bureau a given lender actually pulls, and where your score sits on that specific one — Equifax and TransUnion often disagree by a meaningful margin
- Whether the number is being dragged down by something fixable in weeks (utilization) versus something structural (a recent bankruptcy or thin file)
- Whether one strategic payment before application moves you across a lender's threshold — sometimes $1,800 on a card is worth a rate tier
- How each lender weighs a paid collection, a consumer proposal, or a recent late payment, because they genuinely differ
- Whether a B-lender term now with a documented exit plan beats waiting a year for an A-lender approval
- How to sequence the credit pull so your file is shopped once, not five times
Not sure what your score means for your file?
Send Rahul the real numbers — including the ones you'd rather not say out loud. No judgment, no pitch. You'll get a straight answer on which tier you're in today and what it would take to move up.
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