Credit Scores

We recognize how confusing it can be to understand your credit profile. Yet, it’s one of the most important things to fully understand because it impacts your financial health tremendously. To help you, we’ve provided a breakdown below of what you should know about the differences between a credit score, credit rating, and how debt relief options impact your rating.

What is a credit profile?

Your credit profile consists of a credit report, credit score, and credit rating, and it is maintained by Canada’s credit reporting agencies, Equifax Canada and TransUnion Canada.

What is a credit report?

A credit report is a detailed report of your credit history, including a credit score and credit rating. It shows a summary of the amount and all types of credit you have, the length of time you have had these accounts, and your track record in paying bills. It is updated on a regular basis by companies that lend you money or issue credit cards (banks, credit unions, etc.).

What’s the difference between a credit score and a credit rating?


Credit score

A credit score is an indicator of your creditworthiness based on criteria such as payment history, outstanding credit balances, debt level, types of credit, etc. The higher your credit score, the lower the risk you pose to creditors and lenders.

Credit rating

A credit rating is a payment record on a scale from 1 to 9. A rating of “1” means you pay your bills within 30 days of the due date. A rating of “9” means your debt has been sent to a collection agency, or that you have declared bankruptcy. An “I”, “O”, or “R” in front of the number describes the type of credit:

  • “I” is installment credit (a car loan, for example) – pay a specified amount on a regular basis
  • “O” is open credit (line of credit, student loan, for example) – borrow money as needed up to a specified limit
  • “R” is revolving credit (credit cards, for example) – make regular payments in varying amounts

How does a debt management plan, consumer proposal, or bankruptcy affect my credit rating?

If your debt level has reached a point where a debt management plan (DMP), consumer proposal, or bankruptcy are needed, your credit rating is often already at its lowest before you even sign a DMP, file a consumer proposal or bankruptcy. It’s a popular misconception where people who have been making minimum payments and using one card to pay another believe they have ‘good credit’. A debt management plan and consumer proposal result in the same credit score, an R7 and a bankruptcy results in an R9.

Can I improve my credit score?

Of course. Our Licensed Insolvency Trustees can help you set up credit rebuilding during and upon completion of your consumer proposal or bankruptcy.

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Licensed Insolvency Trustees Since 1958