Credit Fundamentals for Investors

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While having good credit is not necessary to invest in Real Estate it certainly makes it a lot easier. Your credit report is maintained by credit reporting agencies of which there are two in Canada, Transunion and Equifax. What everyone should know is that they have the right to look at their credit report for free, but if they are looking for their credit score a small fee will apply.

The four sections to your credit report are:

  1. Personal identification and potentially employment information.
  2. Record of companies that have recently asked for your credit report.
  3. Payment history for accounts that reported your credit balance.
  4. Information on collections, judgements or bankruptcies.

As far as understanding your credit ratings each account will have a number associated with it to reflect the payment status. Below are the possible ratings:



0 Account exists, but there is no recent activity to be rated
1 Account is “PAID AS AGREED AND UP TO DATE”. This is the “BEST” Rating.
2 to 5 Account payment is overdue (how long overdue will determine the exact rating), but the account is not considered “Bad Debt” yet.
7 Payments are being made through a third-party program.
8 Repossession or Foreclosure of collateral.
9 Bad Debt. Account is in collections.


Your credit score is calculated by collecting information on credit report and using a “FICO formula”. The formula has the following components: amounts owed, payment history, credit mix, length of credit history, and new credit. The score helps to assess your credit relative to others and the scale ranges from 300 to 850 with the average score historically being in the high 600s. To learn more about this topic check out

To maintain your credit rating it is suggested you review your credit report annually. If there is an issue you can contact Transunion or Equifax to dispute. Lastly, don’t apply for too much credit within a short period of time, pay your bills on time, and don’t write bad cheques as banks may also report this to credit agencies.


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Elias Zeekeh, MBA, CPA, CMA

Real Estate Investor & Blogger

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