November is Financial Literacy Month in Canada — and one of the most misunderstood areas I come across when working with clients is their credit score and how it directly impacts their mortgage options, interest rates, and long-term financial flexibility.

For many clients, the credit score isn’t just a number — it’s the foundation of their borrowing power. Yet, even financially responsible people often misunderstand how it’s calculated or what affects it.

Here are three of the biggest misconceptions I see:

1. “Checking my score will hurt it.”
   When a mortgage broker checks your credit, it’s considered a soft inquiry within a short timeframe and does not negatively impact your score. In fact, it’s better for one broker to review your file than to have multiple banks pull credit individually.
2. “If I make the minimum payment, my score is fine.”
   Minimum payments keep you in good standing, but high utilization (balances above 30% of your credit limit) can drag your score down — even if you never miss a payment.
3. “My income affects my credit score.”
   Your credit score measures how you manage debt — not how much you earn. However, lenders assess your income separately to evaluate your ability to take on new debt.

Here’s what actually builds a strong credit profile:

1. Consistent, on-time payments. Even a single missed payment can lower your score by 50–100 points.
2. Low credit utilization. Keeping balances below 30% of available limits shows financial discipline.
3. Credit diversity and history. A mix of credit types (credit card, line of credit, car loan) with a long track record of repayment builds credibility.
4. Avoiding unnecessary credit. Each new account shortens your average history and can trigger temporary dips in your score.

Why it matters for your clients:

• A higher score (typically above 680) opens doors to prime mortgage rates and more lender options.
• Weaker credit can limit borrowers to higher-rate or restricted products, which can cost thousands more over time.
• Improving credit by even 25–50 points before purchase or renewal can translate into real savings and negotiating power.

As professionals, one of the best gifts we can give our clients this Financial Literacy Month is education. Helping them understand their credit health before they make a purchase, refinance, or investment move allows us to build stronger, faster-closing files — and ultimately, happier clients.

Check out the below Credit Health Checklist