What Is a Good Credit Score to Buy a House in Canada?
Your credit score is one of the most important factors in getting approved for a mortgage in Canada. Here is everything you need to know about credit score requirements, how your score affects your rate, and what you can do to improve it before buying.
Canadian Credit Score Ranges
In Canada, credit scores range from 300 to 900. Here is how lenders typically categorise scores and what each range means for your mortgage application.
800-900
ExcellentBest rates, easiest approval
720-799
Very GoodCompetitive rates, strong approval
680-719
GoodGood rates, standard approval
600-679
FairHigher rates, some restrictions
300-599
PoorAlternative lenders, high rates
Minimum Credit Scores by Mortgage Type
Different mortgage products have different credit score requirements. Here is a general guide to what you will need.
Insured Mortgage (Under 20% Down)
Required for down payments of 5% to 19.99%. Mortgage insurance premium is added to the mortgage balance.
Conventional Mortgage (20%+ Down)
No mortgage insurance required. Larger down payment reduces lender risk, which can offset a lower credit score somewhat.
Alternative (B) Lenders
For borrowers who do not qualify with traditional lenders. Higher rates and fees, but can be a stepping stone while improving credit.
Private Lenders
Last resort option. Focus more on property equity than credit score. Very expensive and typically short-term (1-2 year terms).
How Your Credit Score Affects Your Mortgage Rate
Even small differences in your interest rate can have a significant impact on your monthly payment and the total cost of your mortgage over time.
Example: $600,000 Mortgage, 25-Year Amortisation
*Total interest paid over the full amortisation period. Rates shown are illustrative examples and will vary based on market conditions, lender, and individual circumstances. The difference between a 760+ score and a 600 score could cost over $200,000 in additional interest.
What Affects Your Credit Score?
Understanding the factors that make up your credit score helps you know where to focus your efforts for improvement.
Payment History (35%)
The most important factor. Paying all bills on time — credit cards, loans, utilities — builds a strong payment history. Even one missed payment can significantly lower your score.
Credit Utilisation (30%)
The percentage of your available credit that you are using. Aim to keep utilisation below 30% of your total credit limit. Using $3,000 of a $10,000 limit is ideal.
Credit History Length (15%)
The longer your credit accounts have been open, the better. Avoid closing old credit cards even if you do not use them regularly — the history helps your score.
Credit Mix (10%)
Having a mix of credit types (credit cards, car loan, line of credit) shows lenders you can manage different kinds of debt responsibly.
New Credit Inquiries (10%)
Each time you apply for new credit, a 'hard inquiry' is recorded. Too many inquiries in a short period can lower your score. Mortgage rate shopping within 14-45 days counts as one inquiry.
How to Improve Your Credit Score Before Buying
If your score is not where you want it to be, here are actionable steps you can take to improve it before applying for a mortgage.
Pay Every Bill on Time
Set up automatic payments or calendar reminders for all bills. Even a single late payment can drop your score significantly. This is the fastest way to build a positive track record.
Immediate impact after 30-90 days
Reduce Credit Card Balances
Pay down credit card balances to below 30% of your limit. If your limit is $10,000, keep your balance under $3,000. Pay more than the minimum each month and avoid carrying balances.
Score improvement within 30-60 days
Dispute Errors on Your Report
Check your credit reports from Equifax and TransUnion for errors — wrong accounts, incorrect balances, or outdated information. Disputing errors can result in quick score improvements.
30-45 days for resolution
Avoid Opening New Accounts
In the 6 to 12 months before applying for a mortgage, avoid opening new credit cards, taking out loans, or making large purchases on credit. Each application creates a hard inquiry.
Ongoing — start 6-12 months before buying
Keep Old Accounts Open
Do not close old credit cards, even if you are not using them. The age of your credit history matters. An older account with a zero balance helps your score.
Ongoing benefit
Use a Secured Credit Card
If you have no credit history or are rebuilding, a secured credit card (where you provide a deposit as collateral) is an effective way to start building positive credit history.
6-12 months to establish history
Frequently Asked Questions
What is the minimum credit score to buy a house in Canada?
The minimum credit score to qualify for a mortgage in Canada is generally 600 for a traditional lender (bank or credit union) with mortgage default insurance through CMHC, Sagem, or Canada Guaranty. However, some alternative (B) lenders may consider scores as low as 500, typically at higher interest rates. A score of 680 or above is considered good and will give you access to the best rates and terms.
How does my credit score affect my mortgage interest rate?
Your credit score directly impacts the interest rate you are offered. Borrowers with scores above 760 typically qualify for the lowest available rates. Scores between 680 and 759 still receive competitive rates. Below 680, you may face higher rates, and below 600, you will likely need to work with alternative lenders who charge significantly more. Even a small difference in rate can add tens of thousands of dollars over the life of a mortgage.
What credit score do I need for a CMHC-insured mortgage?
To qualify for mortgage default insurance through CMHC (required for down payments under 20%), you generally need a minimum credit score of 600. However, individual lenders may set their own minimums higher — many major banks require 640 to 680 for insured mortgages. A higher score improves your chances of approval and secures better terms.
How can I check my credit score in Canada?
You can check your credit score for free through services like Borrowell (Equifax score) or Credit Karma (TransUnion score). You are also entitled to a free credit report from both Equifax Canada and TransUnion Canada once per year by mail. Checking your own score does not affect it — this is considered a 'soft inquiry' and has no impact.
How long does it take to improve my credit score?
Improving your credit score is possible but takes time. Small improvements from paying bills on time and reducing credit utilisation can show results within 30 to 90 days. More significant improvements, such as recovering from missed payments or collections, can take 6 to 24 months. Starting early and being consistent is key.
Can I buy a house with bad credit in Canada?
Yes, it is possible to buy a house with a lower credit score in Canada, but your options will be more limited. Alternative (B) lenders and private lenders work with borrowers who have lower scores, though at higher interest rates and with larger down payment requirements (typically 20% or more). Many buyers use this as a temporary solution while working to improve their credit for a future refinance at a better rate.
Related Resources
Ready to Start Your Home Buying Journey?
Joe Battaglia and the Battaglia Team at RE/MAX Realty Specialists can connect you with trusted mortgage professionals, help you understand your buying power, and guide you through every step of the home buying process in Mississauga, Brampton, Oakville, and the GTA.