Before you fall in love with a house in London, Ontario, a lender will look at a number you may rarely think about: your credit score. It does not decide everything, but for most buyers who need a mortgage, it can change whether you get approved, what interest rate you are offered, and how smooth the whole process feels.
Here it is in plain words, with no jargon left unexplained.
First, what is a credit score?
A credit score is a three digit number, from 300 to 900, that sums up how you have handled borrowed money over time. Higher is better. It is not a grade on you as a person. It is simply a lender's quick way of asking: based on the record, how likely is this person to pay back a loan on time?
In Canada, two companies keep these records. They are called credit bureaus, and their names are Equifax and TransUnion. Each one keeps a credit report on you, which is a list of your loans, credit cards, phone bills that are reported, payments, and any missed payments or debts sent to collection. Your score is calculated from that report.
One surprise: you usually have two scores, one from each bureau, and they are often a little different. That is normal. Not every lender reports to both companies at the same time, so the two reports are rarely identical. Neither one is the "real" one. A lender simply uses the one, or both, that it relies on.
What does a lender actually look at?
Your score is built from five things, in plain words:
Payment history. Do you pay on time, every time? This is the biggest piece, about 35% of the score.
Credit use. How much of your available credit are you using? This is about 30% of the score. If your card limit is $10,000 and you owe $9,000, you are using 90% of it, and that worries lenders, even if you never miss a payment.
Length of history. How long have your accounts been open? Longer, in general, looks steadier.
Mix of credit. Do you have different kinds of credit, for example a credit card and a phone plan or a loan? This is a smaller piece.
New applications. Have you applied for a lot of new credit lately? Many applications in a short time can lower the score a little.
But your score is not the whole story. A lender also looks at your income, how stable your job is, how much debt you already carry compared to your income, your down payment, and a test called the mortgage stress test. The stress test is simple to understand: the lender checks whether you could still afford the payments if interest rates were higher than today's rate. So a good score helps, but it does not replace income or a down payment.
What score do you need?
There is no single minimum score that every lender uses, so be careful with anyone who promises you one magic number. As a general guide, in many cases a score around 680 or higher may improve your chances with major lenders. Lower scores may still be accepted by other lenders, sometimes called alternative lenders, but usually on different terms, for example a higher interest rate or extra conditions.
In other words, a higher score does not just help you get a "yes." It can mean a better rate, and a better rate can mean a lower monthly payment over years. A lower score does not automatically mean "no." It may mean fewer lender choices, or a plan to improve the score first and apply a little later.
The surprise most buyers do not know
Checking your own credit score does not hurt it. When you check your own report, that is called a soft check, and it does not change your score. What can lower your score a little, temporarily, is a hard check, which is when a lender checks your credit because you applied for credit. So do not be afraid to look at your own report. In fact, looking is the first step to fixing it.
Here is a second surprise: you can hurt your score without ever missing a payment. If you carry a high balance on your cards month after month, lenders may read that as "this person is living close to the limit," even if every payment arrives on time. Paying the balance down, so you use a smaller share of your limit, is one of the most useful moves you can make.
What to do before you ask for a pre-approval
A pre-approval is when a lender reviews your income, debts, and credit and estimates how much you may be able to borrow. It is not a final approval, but it gives you a realistic budget before you start shopping. Before you ask for one, these steps help, and they work best if you start months ahead, not days ahead:
Check both reports, from Equifax and TransUnion, and look for mistakes. An account that is not yours, a wrong balance, or a payment marked late by error can drag your score down. If you find an error, ask the bureau to correct it.
Pay every bill on time. If it helps, set up automatic payments so a due date never slips past you.
Keep your credit card balances low. As a general guide, try to use less than 30% of your available limit. On a $10,000 limit, that means keeping the balance under $3,000.
Do not open new credit just before applying. A new store card or furniture financing plan right before a mortgage application can add a hard check and a new debt at the worst moment.
Think twice before closing an old card. Closing it can shrink your total available credit, which can push your credit use percentage up, even though you owe the same amount.
None of this fixes a score overnight. Credit improves over months of steady habits. That is why, if you plan to buy in London in the spring, the winter is a good time to start.
What this means in London right now
This advice matters in any market, but it matters more when buyers have real choice. In September 2026, the latest month published by the London and St. Thomas Association of REALTORS (LSTAR) as of early November, 561 homes sold in the region, the benchmark price, which is the price of a typical home, was $552,500, there were 5.9 months of inventory, and about 35 of every 100 new listings sold. Homes sold at about 96.9% of their asking price on average, so close to the asking price. In a market like that, a buyer who arrives with a pre-approval and a clear budget is in a stronger position to move when the right home appears.
One quick note on rates, so nothing here is out of date: on October 28, 2026, the Bank of Canada raised its policy rate to 2.50%, and the big banks raised their prime rate, the base rate banks use to set variable mortgage rates, to 4.70%. The next Bank of Canada decision is December 9, 2026. Your credit score does not change those rates, but it can change the rate a lender offers you on top of them.
The simple bottom line
Your credit score is not a mystery and it is not permanent. It is a record, and records can be checked, corrected, and improved. Check your own reports, pay on time, keep balances low, and avoid new credit before you apply. Then get your pre-approval, so you shop for a home in London with a budget you can trust.
If you want help figuring out where you stand, and what payment feels comfortable for you, we are happy to walk through it with you, step by step, in English or Spanish.
Paola Cano is a Real Estate Broker and Jose Ramirez is a Sales Representative, serving London, Ontario and surrounding areas.
— Paola Cano & Jose Ramirez, Thrive Realty Group Inc., Brokerage, London, Ontario.
Sources: LSTAR September 2026 Residential Market Activity Report (region: 561 sales, benchmark $552,500, 5.9 months of inventory, 34.7% sales to new listings ratio, 96.9% of asking price on average); Bank of Canada policy rate decision, October 28, 2026 (2.50%, prime 4.70%, next decision December 9, 2026); Credit Karma Canada guide on preparing a credit score for a mortgage (score range 300 to 900, Equifax and TransUnion, around 680 may improve chances with major lenders, checking your own credit is a soft check that does not affect your score).