What Is Credit, and Why Does It Matter in Canada?

Credit is simply the ability to borrow money or use a service now and pay for it later. When a bank lets you use a credit card, finances a car, or approves a mortgage, they are giving you credit. They are trusting that you will repay on time.

In Canada, that trust is measured and recorded. Two credit bureaus, Equifax Canada and TransUnion Canada, collect information about how you borrow and repay. Lenders use it to decide whether to approve you and what interest rate to charge.