In Canada, every form of credit--even if it's as simple as a basic car loan--boils down into a single credit score which indicates a borrower's reliability to repay when asking for money. Credit scores can be obtained free of charge from two credit bureau companies: Trans Union Canada and Equifax Canada.
Score Ranges
A Canadian credit score (or FICO, as it's called from Equifax) judges a borrower's financial health and gives lenders a single-score snapshot of the borrower's reliability to manage debt. These scores can range from a low of 300 to 900.
Types of Credit
Canadian credit bureaus code borrowing facilities into three different categories on a credit report, which feeds into the score. "R" indicates revolving credit or credit cards. This is the most common code. "I" stands for installment credit or personal loans and car loans; and "O" means open credit or lines of credit and student loans.
Credit Ratings
Credit ratings that contribute to a borrower's overall score range from 0 to 9. A "0" rating is reserved for new, unused credit while a "1" is the best you can have. A "9" score is the worst and usually reserved for bankruptcies.
The ratings are combined with the credit type code. For example, "R1" indicates a perfect revolving credit rating.
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