There is no single credit score you need for a loan
No federal rule sets a minimum credit score for a loan in Canada, and neither of the two national credit reporting bureaus approves or declines anyone. As the Financial Consumer Agency of Canada explains, your credit report and score are records of how you have handled credit; the decision to lend, and the price attached to it, belongs to the lender.
What lenders actually do is sort files into bands. A file in the strongest band clears most automated screens. A file in a middle band may clear some products and not others, or clear only with conditions attached. A file in a lower band usually needs something else to carry the application forward: a co-signer, collateral, a longer relationship with that lender, or a smaller amount. Where those bands sit is a business decision each lender makes, and most do not publish it.
That is why confident numbers circulate online, usually phrased as a specific score that “gets you approved.” Treat any single figure you read as one lender's internal preference at one moment, not a national threshold. If a page tells you the exact credit score required for a line of credit, it is fair to ask which lender's policy that number came from and how recently it was true.
Why the same score gets different answers at different lenders
Two applicants with an identical score can get opposite answers, because a score is a summary and lenders read the whole file behind it. The score tells them roughly where you sit; everything else tells them what the risk actually looks like.
- How the file got there. A score built on years of on-time payments reads differently from the same score built on recent missed payments or a card sitting near its limit.
- Income and stability. Lenders look at how long you have held your job or run your business, and at whether income arrives steadily or seasonally.
- Total debt service. Payments you already carry matter as much as the new one. Federally regulated mortgage lenders generally work to a total debt service ratio ceiling of about 44%, and qualify an uninsured mortgage at the greater of the contract rate plus 2 percentage points and 5.25%, under OSFI Guideline B-20.
- Security. A loan backed by an asset is a different calculation from an unsecured one. At federally regulated lenders, a home equity line of credit is generally limited to 65% of appraised property value, with total secured lending usually capped at 80%.
- Who regulates the lender. Lending in Canada is licensed provincially, so the regulator and the rules differ from one province to the next.
- The lender's own appetite. Some lenders compete for volume at higher risk and price for it; others do not. That shows up in how tight the screen is.
If a decision goes wrong, the complaint route depends on who you dealt with. Consumer complaints about federally regulated financial institutions go to the Financial Consumer Agency of Canada, while provinces license and supervise most other lenders.
How the main options compare
The table below compares broad categories of borrowing rather than specific products or offers. It is a map of how each category is underwritten, not a recommendation.
| Option | Backed by | What lenders tend to weigh | Points to watch |
|---|---|---|---|
| Unsecured personal loan from a bank or credit union | Nothing but your promise to repay | Score band, income and job stability, existing debt payments, history with that institution | The hardest mainstream product to qualify for with a thin or damaged file, and pricing reflects the added risk |
| Secured loan or home equity line of credit | Property or another asset | Equity and appraised value, income, total debt service ratios | The asset is at risk if you default. At federally regulated lenders a home equity line of credit is generally limited to 65% of appraised property value, with total secured lending usually capped at 80% |
| Payday-style loan where a province licenses the model | A pre-authorized debit or post-dated cheque | Income or benefit deposit and an active bank account more than a credit score | Generally up to $1,500 for a term of 62 days or less. The federal Payday Lending Regulations cap the cost of borrowing at $14 per $100 advanced, and a lower provincial cap applies where one exists. Quebec does not license payday lending, which effectively prohibits the model there |
| A file affected by a consumer proposal or bankruptcy | Depends on the product | Whether the filing is complete, how long ago it ended, and what credit has been re-established since | A consumer proposal stays on a credit report for 3 years after completion, or 6 years from filing, whichever comes first; a first bankruptcy stays for 6 years after discharge |
| Rebuilding products, such as a deposit-secured card or a small secured instalment loan | A deposit you provide | Payment history reported over time | Rebuilding is slow by design, and the deposit ties up your own cash. How much it helps depends on how the account is reported and how you use it |
Two rules sit underneath all of these categories. The Criminal Code criminal rate of interest is 35% per year (s. 347), which applies to lending generally, and payday-style credit is constrained further where a province operates a licensed regime. Only a licensed insolvency trustee can administer a consumer proposal or a bankruptcy, so that process starts with a trustee rather than with a lender.
Bank loans for low credit score: what actually changes
When someone searches for bank loans for low credit score, what usually changes is not whether the product exists but the terms attached to it. A lender working with a weaker file tends to reduce the amount, shorten the term, ask for a co-signer or guarantor, move the loan into a secured version, or simply price for the risk. Sometimes it does all of those at once.
Banks and credit unions are one path among several. Because lending in Canada is licensed provincially, other licensed lenders also operate, and their pricing and screening differ. Shopping for a low credit score loan turns up both legitimate licensed lenders and predatory offers, and the difference is rarely visible in the headline rate. The 35% per year criminal rate is a legal ceiling, not a market price, and it says nothing about whether a particular deal makes sense for you.
No lender is obliged to approve an application or to extend its best pricing. The lowest rates are only available to the most qualified applicants. For anything significant, the right answer depends on your own circumstances, and a regulated professional is the person to ask.
Credit score required for a line of credit
There is no published national credit score required for a line of credit, and the type of line matters more than the number. A line of credit is revolving: you draw, you repay, and you draw again up to a limit, which is why lenders treat it differently from an instalment loan with a fixed end date.
Secured lines, usually home equity lines, are underwritten against property value and income, so a weaker score can sometimes be offset by usable equity. At federally regulated lenders, a home equity line of credit is generally limited to 65% of appraised property value, and total secured lending against the property is usually capped at 80%. Unsecured lines are typically the hardest mainstream product to obtain with a damaged file, because the lender has no asset to recover if payments stop. Where an unsecured line is offered anyway, expect a smaller limit, a higher price for the credit, or both.
Keep in mind that an application leaves an inquiry on your file, and a new account changes how your file reads even if you never draw on it.
How to strengthen a low credit score loan application
The practical work sits mostly before you apply, not in the application itself.
- Pull your reports from both national bureaus, Equifax Canada and TransUnion Canada, and dispute anything that is genuinely wrong. The Financial Consumer Agency of Canada sets out how to request your reports and what to look for.
- Bring revolving balances down. Consistently low balances tend to read better than balances sitting close to the limit.
- Match the application to the product. A file that fits one lender's screen may sit outside another's, so the fit matters more than the advertised headline.
- Supply what the lender needs to see, such as proof of income, and know whether you can add a co-signer or collateral before you apply.
- Ask whether a secured version of the same product is available, since security changes the risk calculation.
- If the file includes a consumer proposal or bankruptcy, let time and re-established payments do their work. Both records clear on a fixed schedule, and only a licensed insolvency trustee can administer those filings in the first place.
Where to find a number that actually applies to you
The figures you see reported in the news are benchmarks, not offers. The Bank of Canada publishes the policy interest rate, the prime rate, conventional mortgage rates and Government of Canada benchmark bond yields, and no lender is obliged to lend at any of them. The same is true of a rate or a score threshold quoted on a comparison site.
The Financial Consumer Agency of Canada covers personal loans, including what a lender must disclose and what to confirm before signing. That is a faster route to a real answer than guessing at a cut-off, and it applies whether you are looking at an unsecured loan, a secured line, or a rebuilding product.
loanmoose.ca is a loan matching and comparison service. We are not a lender, we do not make loans, set rates or make credit decisions, and we cannot tell you which score a particular lender will accept.