No lender publishes a minimum score
The question of what credit score is needed for a line of credit sounds like it should have a lookup answer. It does not. A line of credit is approved against a lender's own internal policy, and that policy changes with the product, the size of the limit you ask for, the security behind it and the lender's appetite for risk at that moment. Two applicants with identical scores can get different answers from the same lender on the same day, because a score is a summary and the lender reads the whole file.
Your credit report is the raw record: accounts, balances, payment history, inquiries and public records such as a bankruptcy or consumer proposal. Your score is a number generated from that record. Canada has two national credit reporting bureaus, Equifax Canada and TransUnion Canada, and the information they hold on you can differ, so a score from one is not automatically the same as a score from the other. The Financial Consumer Agency of Canada explains how reports and scores are built, what they contain and how to request yours.
Line of credit requirements: the rest of the file
Your score is one input. Any of the following can outweigh it, and lenders generally look at them together rather than in isolation.
- Income and stability. How much comes in, from what source, and how long it has been arriving.
- Total debt service. Every required monthly payment you carry, measured against your gross monthly income. Federally regulated mortgage lenders generally work to a total debt service ratio ceiling of about 44%.
- Existing revolving balances. Carried balances on cards and other lines are read as a sign that regular expenses are already being financed with credit.
- Payment history. Missed payments, collections and other derogatory items are assessed as a pattern rather than as a single event.
- Depth of file. A file with only a few months of history gives a lender less to work with than years of on-time payments across several accounts.
- Recent inquiries and new accounts. Several applications in a short window can look like pressure on your budget.
- Collateral. A line secured against property or another asset is underwritten differently, because the lender has a fallback if payments stop.
- Where the lender is licensed. Lending in Canada is licensed provincially, so the regulator and the rules differ depending on the province and the type of lender.
Where a line is secured by your home, federal rules add hard ceilings. At federally regulated lenders, a home equity line of credit is generally limited to 65% of appraised property value, with total secured lending against the property usually capped at 80%. Those secured products are also stress-tested: under OSFI Guideline B-20, federally regulated mortgage lenders qualify an uninsured mortgage at the greater of the contract rate plus 2 percentage points and 5.25%. If the borrowing sits alongside a fixed-rate mortgage, note that Canadian fixed-rate mortgages are compounded semi-annually by law, which affects how a fixed rate and a variable line compare over the life of the borrowing.
How the different options compare
| Option | Secured? | What the lender focuses on | How the limit is set | Effect on your credit file |
|---|---|---|---|---|
| Secured line of credit, including a home equity line of credit | Yes, against property or another asset | Equity, income, debt service ratios and a property appraisal | Equity-driven: generally up to 65% of appraised value at federally regulated lenders, with total secured lending usually capped at 80% | Reported as revolving; the full available limit counts as potential debt in debt service calculations |
| Unsecured line of credit | No | Score, income, existing debts and your history with that lender | The lender's own policy; often starts modestly and grows with demonstrated use | Reported as revolving; a high or fully drawn balance pushes utilization up |
| Credit card | No | Score, income and existing card limits | Set by the issuer's policy rather than by what you request | Revolving; balances are typically reported monthly, so utilization moves quickly |
| Personal installment loan | Often unsecured; sometimes secured | Score, income and affordability of the fixed payment | Fixed amount, fixed term, fixed payment agreed up front | Installment account; the balance falls on schedule, which can help utilization over time |
| Payday loan | No | Income and banking details rather than a long credit history | Small and short: generally up to $1,500 for a term of 62 days or less | High-cost short-term borrowing that many lenders read as a negative signal |
Where a province operates a licensed payday lending regime, the federal Payday Lending Regulations (SOR/2024-114) cap the cost of borrowing at $14 per $100 advanced, and some provinces set a lower cap that applies instead. Quebec does not license payday lending, which effectively prohibits the model there. For scale, the Criminal Code criminal rate of interest is 35% per year, so a product can be legal and still cost far more than a revolving line. A personal loan sits closer to a line of credit in cost, and the Financial Consumer Agency of Canada sets out how those products are structured and what you are entitled to be told about them.
How the size of an approved limit is decided
Approval and limit size are two separate decisions. A lender can approve a line and set a limit well below what you asked for, or decline the amount you wanted and counter with something smaller. Neither outcome is a judgment about you as a person; both come out of a formula.
For an unsecured line, the limit usually comes out of your income, your existing debt payments and your history with that lender. For a secured line, the equity in the property does most of the work, subject to the ceilings described above. On top of that, every lender applies its own concentration rules: how much unsecured revolving credit it is willing to have outstanding with a single borrower, and how much of your income it will let you commit to debt service.
Rate is a separate question again. The Bank of Canada publishes the policy interest rate, the prime rate, conventional mortgage rates and Government of Canada benchmark bond yields. These are benchmarks, not offers, and no lender is obliged to lend at them. The lowest rates are only available to the most qualified applicants.
Does an unused line of credit affect your credit score?
An unused line of credit can affect your credit score, and often in a direction people do not expect. Revolving credit is reported with both a balance and a limit, and the relationship between the two is what scoring models read as utilization. An open line with a zero balance adds to your available credit without adding to your balances, which can lower utilization and help your score over time.
Two things work the other way. Applying for the line usually creates a hard inquiry, and a new account lowers the average age of your accounts. Then there is the part that has nothing to do with scoring: when you apply for other credit, lenders generally count the full available limit on every open line as potential debt, whether or not you have drawn on it. An unused line can therefore leave your file looking stronger to a scoring model while leaving you looking more leveraged to the next lender. The exact weight a scoring model gives to utilization is not published, so treat any single explanation of a score change with caution.
How past credit trouble ages off
Insolvency records stay visible to lenders for a set period. 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 on a credit report for 6 years after discharge. Only a licensed insolvency trustee can administer a consumer proposal or bankruptcy, so anyone else offering to file one for you is not in a position to do so.
A reporting period is not the same as a lender's own waiting period. A lender may want to see a longer stretch of clean payment history before it will open a revolving line, so a record that has dropped off your report is not automatically a green light. If your concern is how a federally regulated financial institution handled your account, the Financial Consumer Agency of Canada takes those complaints; provinces license and supervise most other lenders.
Steps that improve your position before you apply
- Get your reports from both bureaus and correct anything that is wrong, outdated or not yours.
- Bring carried balances down before you apply. Utilization is usually the factor you can move fastest.
- Do not open several credit products in the same month. Space applications out.
- Gather proof of income and, for a secured line, current information about the property.
- Ask about the product before you apply, so you know which line you are actually being considered for and whether the inquiry is worth it.
- Read the disclosure for the interest rate, how it is calculated and what would trigger a change to it.
Where loanmoose.ca fits
loanmoose.ca is not a lender and does not make credit decisions. It is a matching and comparison service that helps you see which kinds of products may fit your situation; the lender decides what happens next. Nothing here is financial, legal or tax advice, and no page can tell you what a specific lender will do with your file. For significant borrowing decisions, including anything secured against your home, it is worth speaking with a regulated professional who can look at your full circumstances.