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What is credit score? Why do you need to know this definition? The MoneySense Glossary is your resource for learning and understanding financial terms.
A credit score is a three-digit number (from 300 to 900) that reflects how well someone manages credit —for example, whether they make loan payments or pay credit card bills on time. The higher your score, the more creditworthy you are considered to be. Your score is based on your credit report, which is stored and updated by Canada’s national credit bureaus, Equifax and TransUnion, based on your financial actions. Lenders, landlords and other parties look at your credit report when deciding if they’ll lend you money, lease you an apartment, hire you, etc. Your credit report can also affect your interest rates on loans.
Example: “Peter was late on a few car payments last year, and it really hurt his credit score.”
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