Your credit score plays a key role when buying a home in Canada. It affects everything from your mortgage approval to the rate you’ll pay. In this guide, Farid Yari, a Toronto Real Estate Advisor, explains why credit matters, how lenders view it, and practical steps you can take to strengthen it before applying for a mortgage.

What Is a Credit Score and Why It Matters

A credit score is a three-digit number between 300 and 900 that shows how reliably you repay borrowed money. Lenders use it to assess your risk level, set your interest rate, and decide how much you can borrow. Farid Yari Real Estate advises clients to review their credit reports at least once a year to catch errors early.

Typical Mortgage Credit Score Ranges in Canada

• Excellent (760 +) – Best rates and easiest approval.
• Good (700–759) – Solid eligibility for most lenders.
• Fair (650–699) – Still eligible but with slightly higher rates.
• Poor (< 650) – You may need a co-signer or alternative lender.

How Credit Scores Affect Mortgage Approval

1. Approval Decision — Low scores may limit access to traditional lenders.
2. Interest Rate — Even 0.5 % difference can mean thousands more in interest.
3. Loan Amount & Terms — Higher scores often qualify for larger or more flexible loans.
4. Lender Type — Lower scores may require B-lenders with higher fees.

How to Maintain a Healthy Credit Score

• Pay all bills on time — even one missed payment hurts your score.
• Keep credit usage below 30 % of your limit.
• Avoid multiple hard credit checks in a short period.
• Keep older accounts open to show long credit history.
• Check reports from Equifax and TransUnion regularly.

How to Improve Your Credit Score

1. Catch up on overdue payments and stay current.
2. Pay down balances to reduce debt-to-limit ratio.
3. Diversify your credit mix responsibly (cards + loans).
4. Use a secured credit card to rebuild trust if needed.
5. Be patient — consistent habits show results within 6–12 months.

Final Thoughts from Farid Yari

Your credit score is more than a number — it reflects your financial habits and stability. A strong score unlocks lower rates and smoother approvals. Farid Yari Real Estate works with trusted mortgage partners across Toronto to help buyers understand their options and improve their profiles before they apply.

Ready to see where you stand?