While credit scores seem to be arbitrary, they’re actually determined according to a rigid mathematical formula. Every debt, credit card and late payment is weighed differently — and these weights differ between TransUnion and Equifax. In general, Equifax Canada weighs its components something like this:

Payment History — 35%

This typically involves recent payments that are more than 30 days late, as well as any collections, judgments or bankruptcies

Outstanding Debt — 35%

This includes the number of creditors owed, credit card balances and allocated limits. A maxed out credit card will have a deeper impact on your credit score than a card with a 25% balance

Credit Account History — 15%

This refers to the length of time your accounts have been open. If you’ve been using a credit card for ten years and have been paying it off on a regular basis, this actually has a positive effect on your overall credit rating

Recent Inquiries — 10%

Every time you apply for a loan or credit card, lenders have to access your credit report to see your score and assess your credit worthiness. Too many of these in a 12 month period — say, if you were shopping around for a mortgage — can reduce your rating.

Types of Credit — 10%

If you have a mix of different types of credit — including revolving credit, such as credit cards and lines of credit, and installment loans that you pay monthly, such as student loans — the better your credit picture will be.