Your credit score could decide your job, your mortgage, even your insurance bill — here’s why every Canadian needs to know their number

Most Canadians know their credit score plays a role in getting a loan, but did you know your credit score also factors into how much you pay for insurance, what mortgage rates you qualify for, or whether or not your rental application will be approved? Some potential employers may even consider credit history and credit scores during the hiring process.

Despite the importance of your credit score, nearly one in four Canadians have never checked their credit score, according to an Equifax survey.

The good news is you can check your credit score for free and, if it's not as good as you'd like, then there are some smart, simple strategies to help you improve it.

Here are five really good reasons to monitor your credit score — and tips for how to do it.

1. You’ll save money on insurance

Depending on where you live in Canada, your credit score can impact how much you pay for home and auto insurance. Apparently, many insurance companies believe that a person's credit score is one of the best predictors on whether or not a person will end up making a future claim.

Residents of Ontario and Newfoundland and Labrador are fortunate in that insurance providers cannot use credit scores to set insurance premiums; however, residents in every other province or territory will need to be mindful that insurers are allowed to use your credit score when calculating the risk of you getting into an accident or getting your car stolen.

Skip out on checking your credit score and you may not even realize why your insurance premiums are so high.

It’s a similar story for home insurance.

That said, not all insurers run credit checks on their clients, and those that do may face restrictions.

Ask your insurance company whether it’s looking at your credit score. If you do have poor credit, you may be able to switch to a home or auto insurer that doesn’t consider that information.

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2. It can help you get a job

Certain employers — especially in finance, government, or jobs requiring security clearance — may request your credit report (with your consent). While they can’t see your exact score, they do review your credit history and repayment habits. Just know that in order to use a credit score, an employer must get your consent.

A strong credit history signals responsibility, while poor credit may raise concerns about financial stress or judgement.

3. Qualify for better credit cards

The best Canadian credit cards with travel rewards, cash back, and low interest rates typically require a higher credit score.

If your score is below average, you may only qualify for secured credit cards or products with higher fees. Building your score with on-time payments and low credit utilization will eventually unlock premium cards and better perks.

Once you build up a solid history of punctual payments, your score will increase and you can start applying for better cards. Consumers with excellent scores gain access to the lowest interest rates as well as premium perks and benefits, as companies are eager to please people they know are safe investments.

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4. Secure a mortgage or rental

Buying a home? Most lenders in Canada want to see a score of at least 680 for mortgage approval, but to access the lowest mortgage rates, aim for a credit score of 760 or higher.

Renters aren’t off the hook. Landlords often check credit reports to confirm tenants can pay on time. Knowing and managing your score can mean the difference between securing your dream home or being denied.

Credit scores greatly impact your ability to secure any kind of loan, including mortgages.

5. Protect yourself from identity theft

In 2023, Canadians reported $554 million in fraud losses — much of it due to identity theft. Regularly monitoring your credit score and report can alert you to suspicious activity, such as new accounts you didn’t open.

Free credit monitoring services in Canada will notify you of sudden drops, giving you a chance to act before fraudsters ruin your financial reputation.

How to check your credit score in Canada

Checking your credit score in Canada is easier — and cheaper — than ever. Several online services now allow you to access your score for free, without hurting your credit. Unlike in the past, you don’t need to pay, incur the hit of a hard credit check, or apply for a new loan to see where you stand.

• Free credit score providers: Companies like Borrowell, Credit Karma and most major banks (RBC, CIBC, BMO, Scotiabank, and TD) offer free credit score access through online banking or apps.
• Credit bureaus: Canada has two official credit bureaus, Equifax and TransUnion. You can request a free copy of your credit report once a year directly from them, though they may charge for score access.
• Soft inquiries only: Checking your own score is considered a soft inquiry, meaning it won’t affect your credit rating.

Experts recommend reviewing your credit report at least once a year to confirm all information is accurate and to catch signs of identity theft early.

Bottom line

Your credit score in Canada is more than just a number. It affects your insurance premiums, career options, housing, borrowing costs and protection from fraud.

With free tools available to check your score and credit report, there’s no reason to stay in the dark. Monitoring and improving your credit score is one of the simplest and most powerful ways to take control of your financial future.

—with files from Romana King