What You Need to Know About the Average Credit Score in Canada?

Key Takeaway: The average credit score in Canada is 672, but it varies by age and province. A good credit score can help you access better financial products and save money on interest. You can improve your credit score by paying your bills on time, using credit wisely, and checking your credit report regularly.

If you’re wondering how your credit score compares to other Canadians, you’re not alone. Your credit score is a three-digit number that reflects your credit history and how likely you are to repay your debts. It can affect your ability to get approved for loans, credit cards, mortgages, and other financial products. It can also influence the interest rates and fees you pay.

But what is the average credit score in Canada, and how do you measure up? In this article, we’ll answer these questions and give you some tips on how to improve your credit score.

Also Read: Pay Off Credit Card Debt Fast: 3 Effective Strategies

What is the Average Credit Score in Canada?

According to Experian, one of the two main credit bureaus in Canada, the average credit score in Canada is 672¹. This is based on the data from the second quarter of 2020. However, the average credit score may vary depending on the source, the credit scoring model, and the period.

The average credit score also differs by age and province. Generally, older Canadians tend to have higher credit scores than younger ones, as they have more established credit histories. Similarly, some provinces have higher average credit scores than others, depending on the economic and demographic factors.

Here is a table that shows the average credit score by age group and province, based on the data from Experian¹:

Province	Average Credit Score
Alberta	682
British Columbia	687
Manitoba	667
New Brunswick	660
Newfoundland and Labrador	660
Nova Scotia	658
Ontario	679
Prince Edward Island	657
Quebec	661
Saskatchewan	669

What is a Good Credit Score in Canada?

Credit scores in Canada range from 300 to 900. The higher your score, the better your credit rating. Generally, a good credit score is considered 660 or above. However, different lenders and creditors may have different criteria for what they consider a good credit score.

Here is a table that shows the credit score ranges and what they mean, according to TransUnion and Equifax, the two main credit bureaus in Canada:

Credit Score Range	Rating
760-900	Excellent
725-759	Very Good
660-724	Good
560-659	Fair
300-559	Poor

Having a good credit score can help you access better financial products and save money on interest. For example, if you have a good credit score, you may be able to qualify for a lower interest rate on a mortgage, which can save you thousands of dollars over the life of the loan. You may also be able to get approved for higher credit limits, lower fees, and more rewards on your credit cards.

How to Improve Your Credit Score in Canada

If your credit score is lower than you’d like, don’t worry. There are some steps you can take to improve your credit score over time. Here are some tips to help you boost your credit score:

• Pay your bills on time. Your payment history is the most important factor for your credit score, accounting for about 35% of it. To improve your payment history, always make your payments on time and in full, or at least the minimum amount due. If you have trouble remembering your due dates, you can set up automatic payments or electronic alerts from your financial institution.
• Use credit wisely. Your credit utilization, or the amount of credit you use compared to your available credit, is another important factor for your credit score, accounting for about 30% of it. To improve your credit utilization, try to use less than 30% of your credit limit on any card, and pay down your balances as soon as possible. For example, if you have a credit card with a $5,000 limit, try to keep your balance below $1,500.
• Check your credit report regularly. Your credit report is a record of your credit history, and it contains the information that is used to calculate your credit score. You can get a free copy of your credit report from both TransUnion and Equifax once a year. You can also get your credit score for free from various sources, such as Credit Karma. By checking your credit report and score regularly, you can monitor your progress and spot any errors or fraud that may be hurting your credit score. If you find any mistakes, you can dispute them with the credit bureaus and get them corrected.
• Deal with collections accounts. If you have any unpaid debts that have been sent to collections, they can hurt your credit score. To improve your credit score, you should try to pay off your collections accounts as soon as possible or negotiate a settlement with the collection agency. You can also ask the collection agency to remove the account from your credit report once you’ve paid it off, as a goodwill gesture.
• Use a secured credit card. If you have a poor credit score or no credit history, you may have difficulty getting approved for a regular credit card. In that case, you can use a secured credit card to build or rebuild your credit. A secured credit card is a type of credit card that requires a security deposit, which acts as your credit limit. You can use the secured credit card like a regular credit card, and make payments on time and in full. This will help you establish a positive credit history and improve your credit score. After a period of responsible use, you may be able to upgrade to an unsecured credit card and get your deposit back.
• Get credit for rent and utility payments. If you pay rent and utility bills on time, you can use them to boost your credit score. You can sign up for a service that reports your rent and utility payments to the credit bureaus, such as RentReporters⁸ or PayYourRent. This will add positive information to your credit report and increase your credit score. However, you may have to pay a fee for these services, and not all landlords and utility providers may participate in them.
• Add to your credit mix. Your credit mix, or the diversity of your credit accounts, is a minor factor in your credit score, accounting for about 10% of it. To improve your credit mix, you can add different types of credit to your portfolio, such as a credit card, a car loan, a personal loan, or a line of credit. However, you should only do this if you need and can afford the credit, and not just for the sake of improving your credit score. You should also be careful not to apply for too many credit accounts in a short period, as this can lower your credit score and make you look desperate for credit.

How to Check Your Credit Score in Canada

If you want to check your credit score in Canada, you have several options. You can get your credit score for free from various sources, such as NerdWallet, Borrowell, Credit Karma, or Mogo. These sources use different credit scoring models, such as VantageScore or FICO, so your credit score may vary slightly from one source to another.

You can also get your credit score directly from the credit bureaus, TransUnion and Equifax. However, you may have to pay a fee for this service, unless you request it by mail or in person. You can also get a free credit report from both credit bureaus once a year, which contains the information that is used to calculate your credit score. You can request your free credit report online, by phone, by mail, or in person.

It’s a good idea to check your credit score and report regularly, as they can help you monitor your credit health and spot any errors or fraud that may be affecting your credit score. If you find any mistakes or suspicious activity on your credit report, you should report them to the credit bureaus and get them corrected as soon as possible.

Conclusion

Your credit score is a key indicator of your financial health and can affect your access to various financial products and opportunities. The average credit score in Canada is 672, but it varies by age and province. A good credit score is considered 660 or above, and it can help you save money on interest and fees. You can improve your credit score by following some simple tips, such as paying your bills on time, using credit wisely, and checking your credit report regularly. By improving your credit score, you can achieve your financial goals and enjoy the benefits of good credit.

References

(1) Improving your credit score – Canada.ca. https://www.canada.ca/en/financial-consumer-agency/services/credit-reports-score/improve-credit-score.html. (2) How to Improve Your Credit Score Fast – Experian. https://www.experian.com/blogs/ask-experian/credit-education/improving-credit/improve-credit-score/. (3) 8 tips to build or rebuild your credit score | National Bank. https://www.nbc.ca/personal/advice/credit/how-to-rebuild-your-credit.html.