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Capital Game

Everything You Need to Know About Your Credit Score: Understand, Protect, and Improve Your File

Warning – Erratum

An error was found in the Capital game regarding the question about the minimum credit score required to obtain a CMHC-insured mortgage. The answer printed on the card indicated “680,” whereas the current minimum score is “600,” as CMHC reverted to this requirement on July 5, 2021. This information is confirmed in CMHC’s official documentation (2025 edition, “Creditworthiness” section). We apologize for this error and thank our clients for their vigilance.
Your credit score plays a key role in your financial life. Whether you’re applying for a mortgage, a car loan, a credit card—or even signing up for a mobile phone plan—your score can determine your chances of approval, the rates you get, and your access to financial products. Here's what you need to know to understand, protect, and improve your credit profile.

1. Unpaid telecom bills can hurt your credit

Many people don’t realize that unpaid phone, internet, or cable bills can be sent to a collection agency. When this happens, the account is reported to credit bureaus like Equifax and TransUnion.
  • A collection account can stay on your credit report for up to 6 years
  • It may significantly lower your credit score
  • It can make it harder to get approved for loans or qualify for good terms

Even if the amount is small, a collection record is seen by lenders as a major red flag. It's always better to pay the bill quickly to avoid long-term damage to your credit.

2. Closing an old credit card may lower your score

It may seem smart to close a credit card you no longer use, but doing so can have a negative short-term impact on your credit score.

Why? Because closing a card affects:

  • Your credit history length: Older accounts help show long-term reliability.
  • Your credit utilization ratio: Closing a card reduces your total available credit, making your usage ratio higher—a key factor in your score calculation.
Even if you always pay on time, closing an old account can slightly lower your score and send a negative signal to lenders.

3. Checking your credit report does not lower your score

Contrary to popular belief, you can check your own credit report or score as often as you like, without hurting your credit.
  • A personal credit inquiry (also called a soft pull) has no impact on your score.
  • Only credit applications by lenders (hard inquiries) may lower your score slightly.
In fact, it’s a good habit to check your report regularly to catch errors, fraud, or suspicious activity early.

4. Having debt isn’t bad—mismanaging it is

You don’t need a perfect score or zero debt to build a strong credit profile. In reality, borrowing responsibly and paying on time is one of the best ways to boost your score.

What helps your score:

  • Consistently paying on time
  • Using less than 30% of your credit limit
  • Having a good repayment history (car loan, mortgage, etc.)

What hurts your score:

  • Late payments
  • Maxed-out credit cards
  • Too many credit applications in a short time
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Well-managed debt is seen by lenders as a sign of financial reliability

5. Credit Score Has Become a Key Criterion for Accessing an Insured Mortgage

Since July 5, 2021, the Canada Mortgage and Housing Corporation (CMHC) requires at least one borrower on an insured mortgage application to have a minimum credit score of 600.
  • This rule helps reduce lending risk
  • Private insurers or lenders may allow lower scores, but usually with higher rates or stricter conditions
  • If your score is below 680, you may limit your mortgage options
For first-time buyers with a low down payment, your credit score can determine your ability to get financing at all.

6. A strong credit score gives you better mortgage rates

Your credit score can directly impact:

  • The interest rate you're offered
  • Whether your mortgage application is approved easily
  • Access to more flexible or affordable loan products
A high score reassures lenders that you are low risk, which can give you better borrowing options, more leverage, and long-term savings.

In Conclusion

Your credit score is more than just a number—it’s a reflection of your financial behavior, and it follows you throughout your adult life. By understanding what helps and what harms your score—telecom accounts, credit card closures, responsible debt use, and more—you can build a healthier credit profile and open more doors for your future.