Most people think the credit decision comes down to one number. Your credit score. Hit the threshold and you are in. Miss it and you are out.
It is not that simple.
Your credit score matters. But it is one factor inside one category of a five-part evaluation that lenders in Canada use every time someone applies for credit. It is called the 5 Cs of Credit. And most Canadians have never heard of it.
Character: Will you pay it back?
Character is the most important C. It is your track record with borrowed money. Equifax and TransUnion maintain a file on you that records every credit account you have opened, every payment you have made or missed, and every time someone has checked your report. That file generates your credit score, a number between 300 and 900 in Canada. It is Character reduced to a single figure.
Payment history alone accounts for roughly 35% of that score. Credit utilization, how much of your available credit you are currently using, accounts for another 30%. Together, those two factors make up nearly two thirds of the number lenders see first.
Capacity: Can you afford it?
Capacity is about income relative to obligations. Lenders want to know that a new payment will not stretch you past what you can handle. They look at how much you earn, how much you already owe, and how much room is left. Income does not appear on your credit report. Lenders get it from your application. But one piece of Capacity does show up on your report: credit utilization. If your balances are high relative to your limits, it signals financial stress, even if your income is strong.
Capital: Do you have a safety net?
Capital is your savings, investments, and other assets. It tells the lender that if something unexpected happens, a job loss, a medical emergency, you have resources to absorb the shock without missing payments. Capital is assessed from your application, not from the credit bureaus. Your savings account is invisible to your credit score. But it is not invisible to your lender, especially for large loans like mortgages.
Conditions: What is the economic context?
Conditions is the one C you cannot control. It covers the purpose of the loan, the state of the economy, interest rate trends, and even the industry you work in. A home purchase during a stable economy looks different to a lender than a speculative investment during a downturn. If a lender says no and nothing about your own finances has changed, Conditions may be the reason.
Collateral: Is an asset backing the loan?
Collateral is something valuable that you pledge as security. A home for a mortgage. A car for a car loan. If you stop paying, the lender can take it. Secured loans carry lower interest rates because the lender has something to fall back on. Unsecured loans cost more because the lender has nothing but your promise.
Why this matters
When you only focus on your credit score, you are managing one piece of one C. That is like studying for one question on a five-part exam. The Canadians who get the best rates, the fastest approvals, and the most options are the ones who understand the full picture. All five Cs. Working together.
That is what Credit Bright teaches.