What Counts as a Bad Credit Score in Canada? (TransUnion & Equifax Tiers Explained)

June 24, 2026

What Counts as a Bad Credit Score in Canada?

Published June 2026

If you’ve ever been declined for a loan, credit card, or financing application, you’ve probably wondered whether your credit score was the reason.

One of the most common questions Canadians ask is: “What is considered bad credit in Canada?” If you’re wondering whether you have a bad credit score in Canada, understanding how Equifax and TransUnion classify credit scores is the first step toward improving your financial options.

The answer isn’t always straightforward. While most lenders consider a credit score below 560 to be poor, Equifax and TransUnion use different scoring models, and lenders often apply their own approval criteria as well. That means a score that one lender considers risky might still qualify with another lender.

Understanding whether your score falls into the poor, fair, or good credit range is important because it directly affects the types of financing available to you. If you’re already dealing with a low score and exploring borrowing options, our comprehensive guide to bad credit loans in Canada explains how alternative lenders assess applications and what solutions may be available.

In this guide, we’ll explain:

• What bad credit means in Canada
• Equifax and TransUnion credit score tiers
• How lenders view different score ranges
• What causes bad credit
• How bad credit affects loan approvals
• Practical ways to improve your credit score

What Is a Credit Score?

A credit score is a three-digit number that helps lenders assess how likely you are to repay borrowed money.

In Canada, credit scores range from 300 to 900, with higher scores indicating lower lending risk. The two major credit bureaus that calculate and maintain credit scores are:

• • Equifax Canada
  • TransUnion Canada

Both bureaus collect information from lenders, banks, credit card companies, and other creditors to build your credit profile. Although they use the same overall 300–900 scale, your scores may differ because each bureau can receive different information and use different scoring models.

What Is Considered a Bad Credit Score in Canada?

Generally speaking, a credit score below 560 is considered bad or poor credit in Canada. Borrowers in this range often face:

• Higher interest rates
• Fewer loan options
• Lower approval odds
• Stricter lending requirements

Most major banks and traditional lenders prefer borrowers with scores above 660, while scores below 560 often require alternative lending solutions.

However, your score alone does not determine approval. Lenders also evaluate:

• Income
• Employment stability
• Existing debt obligations
• Debt-to-income ratio
• Banking history
• Assets and collateral

This is why some borrowers with poor credit can still qualify for financing.

Canadian credit score ranges used by most lenders. Scores below 560 are generally considered poor credit, while scores above 760 qualify for the strongest borrowing opportunities.

For more information about how credit scores work and what factors affect them, Canadians can review the resources provided by the Financial Consumer Agency of Canada (FCAC).

Equifax Credit Score Ranges Explained

Many Canadian lenders use Equifax data when assessing loan applications.

Here’s how Equifax generally categorizes credit scores:

Credit Score	Rating	Meaning
300–559	Poor	High risk to lenders
560–659	Fair	Limited borrowing options
660–724	Good	Eligible for many credit products
725–759	Very Good	Strong approval odds
760–900	Excellent	Best rates and terms available

A score below 560 is generally considered bad credit under Equifax’s scoring model.

TransUnion Credit Score Ranges Explained

TransUnion uses different scoring models, which can result in different ratings for the same numerical score.

One commonly referenced TransUnion range is:

Credit Score	Rating
300–692	Poor
693–742	Fair
743–789	Good
790–832	Very Good
833–900	Excellent

This is one reason why your Equifax and TransUnion scores may not match exactly. A score considered “Good” by one bureau may be categorized differently by the other.

Why Are My Equifax and TransUnion Scores Different?

Many Canadians are surprised when they check both bureaus and discover different scores.

This happens because:

Different Information Sources

Not every lender reports to both bureaus.

Some banks report only to Equifax, while others report only to TransUnion.

Different Scoring Models

Each bureau uses proprietary formulas that weigh credit behaviours differently.

Different Update Timelines

One bureau may receive updated information before the other.

Small differences of 10–30 points are common and usually nothing to worry about.

While credit scores vary across the country, most Canadians fall within the Good credit range. Understanding where your score sits compared to the average can help you gauge your borrowing position and identify opportunities for improvement.

 

What Causes Bad Credit?

Bad credit rarely develops overnight.

It’s usually the result of negative financial events or ongoing credit management issues.

Late Payments

Payment history is one of the most important factors affecting your score.

Missed payments can significantly lower your credit score and remain on your report for years.

High Credit Utilization

Using too much of your available credit can signal financial stress.

Experts generally recommend keeping utilization below 30%.

Collections Accounts

Unpaid debts that are sent to collections can severely damage your credit profile.

Bankruptcy

Bankruptcy is one of the most serious credit events and can impact your score for years.

Consumer Proposal

While often less damaging than bankruptcy, a consumer proposal still negatively affects your credit report.

Too Many Credit Applications

Multiple hard credit inquiries in a short period can temporarily reduce your score.

Can You Get a Loan with Bad Credit?

Yes.

Many Canadians assume bad credit automatically means loan denial, but that’s not necessarily true.

Alternative lenders often focus on a broader picture, including:

• Employment income
• Monthly cash flow
• Ability to repay
• Stability of residence
• Existing debt obligations

At FatCat Loans, we understand that life happens. A lower credit score doesn’t always reflect your current financial situation.

If you’re struggling with a bad credit score in Canada, our bad credit loans may provide options even when traditional banks say no.

What Credit Score Do Most Lenders Want?

While requirements vary, many lenders use the following guidelines:

Credit Score	Typical Lending Outcome
760+	Best rates and approvals
725–759	Strong approval chances
660–724	Approved for most products
560–659	Higher rates and fewer options
Below 560	Alternative lending often required

Keep in mind that approval depends on more than your score alone.

While every lender has unique approval criteria, the table below shows how different credit score ranges typically affect borrowing opportunities in Canada.

How Bad Credit Affects Borrowing

Bad credit can impact several areas of your financial life.

Higher Interest Rates

Lenders charge more to offset perceived risk.

Lower Loan Amounts

You may qualify for smaller borrowing limits.

More Documentation

Lenders often require additional proof of income and employment.

Mortgage Challenges

Mortgage approval can become more difficult, especially through major banks.

Rental Applications

Landlords frequently review credit reports before approving tenants.

Utility and Phone Deposits

Some providers may request security deposits from applicants with poor credit.

How to Improve a Bad Credit Score in Canada

Improving your score takes time, but the effort is worthwhile.

Pay Every Bill on Time

Consistent payment history is one of the fastest ways to rebuild credit.

Reduce Credit Card Balances

Aim to keep utilization below 30%.

Avoid Unnecessary Applications

Only apply for credit when necessary.

Check for Reporting Errors

Mistakes on credit reports are more common than many people realize.

Review both Equifax and TransUnion reports regularly.

Keep Older Accounts Open

A longer credit history generally helps your score.

Use Credit Responsibly

Small balances paid off consistently can strengthen your profile over time.

Where Can You Check Your Credit Score?

Canadians can access their credit information through:

• Equifax Canada
• TransUnion Canada
• Borrowell (Equifax score)
• Credit Karma Canada (TransUnion score)
• Many Canadian banks and credit unions

Checking your own credit score through approved consumer services does not typically hurt your credit score.

When Should You Consider a Bad Credit Loan?

A bad credit loan may be worth considering if:

• You need emergency funds
• You have steady income but poor credit history
• You’re rebuilding after financial hardship
• You’ve been declined by traditional lenders

Before borrowing, always ensure you can comfortably manage repayments and understand the total borrowing cost.

You can learn more about personal loans in Canada and explore available borrowing options that match your financial situation.

The Bottom Line

In Canada, a bad credit score generally refers to a score below 560, although lenders may use slightly different criteria depending on whether they rely on Equifax, TransUnion, or their own internal approval systems.

Having a bad credit score in Canada can make borrowing more challenging, but it doesn’t automatically prevent you from accessing financing. Many lenders consider factors beyond your credit score, including income, employment stability, and your ability to repay.

By making payments on time, reducing debt, and using credit responsibly, you can gradually improve your credit profile and increase your access to better borrowing options.

If you’re exploring financing while rebuilding your credit, our guide to bad credit loans in Canada explains how these loans work, who may qualify, and what to consider before applying.

Related Reading

If you’re researching bad credit and borrowing options in Canada, these guides may help:

• Bad Credit Loans in Canada – Learn how bad credit loans work, who qualifies, and what to expect when applying.
• Personal Loans – Explore flexible borrowing options for everyday expenses, debt consolidation, and unexpected costs.
• Bad Credit Loans – Discover loan solutions designed for Canadians with less-than-perfect credit histories.
• Installment Loans – Understand how installment loans work and why predictable repayments can make budgeting easier.
• Loan Calculator – Estimate monthly payments and borrowing costs before submitting an application.

Looking to Improve Your Financial Health?

Building a stronger credit profile takes time, but understanding how lenders assess creditworthiness is the first step. Whether you’re rebuilding your score, comparing borrowing options, or preparing for a future loan application, the resources above can help you make informed financial decisions.

Frequently Asked Questions

Is a 600 credit score considered a bad credit score in Canada?

A credit score of 600 is generally considered fair rather than poor. While some lenders may view it as below average, many Canadians with a 600 credit score still qualify for loans and credit products.

What credit score is considered poor by Equifax?

Equifax generally classifies scores between 300 and 559 as poor credit.

What is the minimum credit score needed for a loan in Canada?

There is no universal minimum score. Some alternative lenders approve borrowers with scores below 560, while traditional lenders often prefer scores above 660.

Can I improve my credit score in six months?

Yes. Paying bills on time, reducing balances, and avoiding new debt can produce noticeable improvements within several months.

Why does my TransUnion score differ from my Equifax score?

The bureaus may receive different information and use different scoring models, which often results in different scores.