How Credit Scores Differ in Canada Vs. the USA

If you don’t live in the States, looking for financial information online can be tricky. Many of the most trusted resources that come up with a typical Google search are written by and for Americans, with advice based on American products, standards, and laws. If you aren’t careful, you can get the wrong idea about a lot of different topics.

One such topic is credit reporting.

Credit reports and scores in Canada share enough similarities with American scoring systems that you can easily think they’re identical. While both systems serve to judge borrowers on their abilities, there are some key differences that you need to know.

Reporting Agencies

In the US, the three major reporting agencies are Equifax, Experian, and TransUnion. There’s one less in Canada, with just Equifax Canada and TransUnion Canada taking the crown as the major agencies.

So, here’s the question of the hour: what is your Canadian Credit Report? It’s a detailed list of your past borrowing history that shows your account details, payment histories, and utilization ratio. It may include information from personal loans, mortgages, auto financing, and lines of credit.

Equifax Canada and TransUnion Canada may include different information, which may result in each agency generating a different score. This happens if a lender shares your account information with just one of the agencies and not the other.

Score Ranges

Equifax and TransUnion analyze the contents of your report to generate a numerical score. Both countries operate on a three-digit scoring system, but the range varies from one nation to the next. In Canada, your score may fall between 300 and 900. However, the USA shortens this range to 300 and 850.

In both cases, this score reflects the details contained in your report, generated by the reporting agencies according to their unique scoring algorithms.

Regardless of where you call home, these scores share a similar rule: the higher your number is, the better. As your score climbs the scale, you’ll have a greater chance of being approved for loans and lines of credit at better rates and terms.

Rating Ranges

Knowing your exact three-digit score is important, but understanding how your score rates may be more helpful. Since the ranges between countries differ, the categories (or ratings) don’t align —as you’ll see below.

In Canada, ratings fall into the following categories:

• Excellent: 780 and above
• Very Good: 720–779
• Good: 680–719
• Average: 620–679
• Poor: 580–619
• Very Poor: 500–579
• Less Than Perfect: 300–500

Compare this to how the ratings fall in the USA:

• Excellent: 800–850
• Very Good: 740–799
• Good: 670–739
• Fair: 580–669
• Poor: 300–579

Entry Expiry

No credit score is permanent. It’s a dynamic number that evolves as you pay bills, draw against your line of credit, and apply for personal loans. Each time your lender shares account data, it becomes an entry in your report that affects your score.

Each entry has an expiry date, after which they will no longer impact your credit.

In Canada, negative info usually stays on your report for six years. However, positive history may last for as long as two decades. In the States, all entries last just 10 years.

Bottom Line

Both countries have credit scores that assess the creditworthiness of borrowers, but don’t be fooled — they aren’t identical systems.