Credit Scores explains the numerical side of Canadian credit reporting. A score can influence approvals and pricing, but it is still only a summary of the underlying file rather than the whole story.
This section helps readers understand what a score is, how score conversations relate to payment behaviour and utilization, how file age and recent credit activity affect interpretation, what major score factors are usually being discussed, and why different lenders may still place the same borrower into different risk buckets.
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In this section
- Credit Score
A credit score is a numerical summary of how a borrower's credit file looks from a lending-risk perspective.
- Score Factor
A score factor is one of the major patterns in a credit file that helps explain why a credit score looks stronger or weaker.
- Payment History
Payment history is the record of whether credit obligations were paid on time, late, or not as agreed.
- Thin Credit File
A thin credit file is a file with limited reported credit information or too little depth for easy risk assessment.
- Credit Mix
Credit mix describes the variety of credit account types that appear on a borrower's file.
- Length of Credit History
How long the borrower's reported accounts and file history have existed, affecting score interpretation.
- Average Age of Accounts
Overall maturity of the accounts on a borrower's file, often discussed as a credit-score factor.
- New Credit
New credit describes recent account openings and other fresh borrowing activity that can make a file look less settled.
- Risk Tier
Risk tier means a lender's broad bucket for how risky a borrower or file appears.
- Prime Borrower
A prime borrower is generally viewed as a lower-risk borrower in a lending decision.
- Score Range
A score range is a banded way of interpreting a credit score rather than reading the number in isolation.
- Near-Prime Borrower
A near-prime borrower sits between prime and subprime in overall lending risk.
- Subprime Borrower
A subprime borrower is generally viewed as a higher-risk borrower in a lending decision.