Credit Scores and Credit History: What’s the Big Deal?
So, what’s all this fuss about credit scores? Are you confused about credit scores and why everyone says they matter?
If you've ever felt unsure about how credit works, you're not alone. Most young Canadians aren't taught about credit until they need it—and by then, it can feel overwhelming.
Updated Feb 16, 2026 6: 35 p.m. MST · 9 min read
Written by the Capital Corner Editorial Team
In short, your credit score is like a snapshot of your financial reliability. To really get what that means, you need to understand two things: credit history and credit score.
Your credit history is basically a record of everything you’ve ever done with credit—credit cards, student loans, car payments, using your line of credit. Your credit score is just a number (ranging from 300 to 900 in Canada) that sums all that up and shows how well you’ve handled it.
The second you buy something with a credit card, take out a student loan, or use credit in any way, you’re building your credit history. It sticks with you. You can’t avoid it; you can’t stop it or turn it off—but you can take control of it.
Why You Need a Credit History (Even If You Hate Debt)
Building a credit history might sound scary, but trust me, you actually want one. Sooner or later, you’ll need a credit history—like when you’re renting an apartment, getting a car, or even signing up for utilities—your credit matters. And yeah, one day it’ll matter even more when you want to buy a house.
The good news—A solid credit history is totally up to you. It’s all about understanding how credit works—and how your choices impact it.
Even better news—you don’t have to go into debt to build a credit history.
For example:
If you use a credit card to buy $50 of groceries, you are borrowing $50 from the bank. If you pay that $50 back before the due date, you've used credit—but you're not carrying debt forward. That's the part many people miss.
You do not have to go into debt to build a credit history.
Everyday Moves Can Build (or Break) Your Credit
Every time you use a credit card or take out a loan, you’re adding to your credit history. All that info gets collected, analyzed, and turned into a number: your credit score.
Think of it like shopping. Every time you buy something, stores track what you bought, how you paid, if you shopped a sale, and so on. You didn’t ask them to track your info—but they still do.
Your credit history works the same way. Most of your credit-related activity gets tracked, whether you know it or not. That’s why it’s so important to use your credit wisely.
Your Credit Score Is Like a School Report Card (Seriously)
Imagine you took English, Math, and Biology. You got 80% in English, 60% in Math, and somehow only 30% in Biology. You’re thinking, “Wait—why is Biology so low? I passed the tests!”
Then your teacher explains: your grade wasn’t just about tests. It also included completing assignments, attending classes, participating in group work, and showing interest in the material. Gulp! Maybe you shouldn’t have skipped so many classes, or maybe you could’ve participated more in group activities. But hey, you didn’t know. Now you have to take the course all over again, because 30% isn’t exactly passing. If only you knew how it all worked, you would’ve definitely done things differently.
That’s exactly how credit works.
It’s not just about whether you pay your bills. It’s also how you pay. Did you pay on time? Did you max out your card? Did you miss a payment? All of that stuff gets factored in.
Your credit history is like your school history. Your credit score is like your final grade.
Here’s the Catch: Most Bills Don’t Build Credit—But Missed Payments Can Hurt You
Most of the bills you’re paying every month—stuff like utilities, rent, phone bills, streaming services, and insurance premiums—don’t actually help you build your credit history. That means even if you’re paying them on time, these bills aren’t reported to credit bureaus like Equifax or TransUnion.
But here’s the kicker: if you mess up and don’t pay them on time (like if your phone bill goes unpaid for a while), the bad part does show up on your credit report. Once an unpaid bill goes to collections, it can ding your credit score and make it harder to get a loan, credit card, or even a decent rental.
So, while your everyday bills might not help build credit directly, paying them on time is still super important if you want to avoid that nasty collections notice on your credit report.
Paid on time doesn't always help your score, but unpaid definitely hurts it.
Don’t Wait Until You’re Denied Credit to Care
It’s way easier to build your credit the right way from the start than to try to fix it later.
Think about it: if you start building credit at 22, by the time you're 25 and ready to get your own place, you'll have three years of solid credit history backing you up.
That could be the difference between getting approved with a great rate—or getting rejected entirely.
Set reminders. Automate payments. Use credit wisely. And don’t ignore your credit score—future you will thank you.
Bottom Line
Your credit score is a snapshot of your financial reliability in Canada, and your credit history is the detailed record that creates that snapshot. You're building both whether you realize it or not. The key is understanding how they work together so you can make smart choices from the start—because credit works best when it's consistent, automatic, and intentional.
Get Started Today
✔️ Check your credit reports: Equifax or TransUnion
✔️ Build credit safely with: Tangerine Money-Back Credit Card or CIBC Adapta Mastercard
✔️ Budget smarter with: YNAB (You Need a Budget) or Spendee
✔️ Report rent payments with: FrontLobby
Frequently Asked Questions
What is the difference between a credit score and a credit report in Canada?
Your credit report (also called your credit history) is the full record of your past credit activity — credit cards, loans, payments and more. Your credit score is the number calculated from that record. The report is the detailed file. The score is the summary number lenders look at. If you want to know what goes into that number, read: What Affects Your Credit Score in Canada? The 5 Factors That Actually Matter.
Does checking my own credit score hurt it in Canada?
No. Checking your own credit score is called a soft inquiry and it does not lower your score. You can check it to stay informed and catch mistakes. If you’re not sure how to check it safely, read: How Do I Find My Credit Score and Report in Canada?
Why is my credit score different from what my bank shows?
Different lenders use slightly different scoring models, so your number may vary depending on where you check it. The important thing is the overall range and your payment habits — not the exact number. If you’re building credit from scratch, read: The Beginner’s Credit-Building Strategy.
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