An inside look at your loans and spending
…affect your credit score
Having a variety of loans could help strengthen your credit score — or harm it, depending on your spending and payment history. But a credit card, car loan and mortgage work differently, making it hard to know how to improve your number.
A credit score ranges between 300 and 900 points. It’s considered a predictor of how likely a borrower is to pay their debt on time. While some credit products influence your score more than others…what really matters is your individual behaviour with credit.
In Canada, Equifax and TransUnion use algorithms and, “It’s really about what data goes into them and the algorithm, in terms of how they calculate (credit scores),” said Rebecca Oakes, Equifax Canada’s vice-president of advanced analytics.
While credit scoring models do care about the kinds of credit products — or mix — you have, it isn’t a dominant factor, said Matt Fabian, director of financial services research and consulting at TransUnion Canada. “A diverse, well-managed mix helps but it doesn’t compensate for late payments,” he said.
Revolving credit products, sometimes have a higher influence on your credit score. It provides better insight how the consumer manages credit on a daily or weekly basis, Oakes said.
Keeping debt-to-credit utilization ratio, low, typically ideally below sort of 30 or 40 per cent, that’s going to help your score,” she said. “If it goes too high and you’re getting close to 100 per cent, that can be a bit of a warning sign of some financial stress. Meanwhile, instalment loans, show the ability to manage a fixed scheduled payment, over a long-term balance repayment period.
Full Read:
- https://www.canadianmortgagetrends.com
- https://www.canadianmortgagetrends.com/2026/04/an-inside-look-at-how-your-loans-and-spending-affect-your-credit-score/
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