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Credit scores are an essential part of personal finance, and can influence everything from loan approvals to your interest rates. In Canada, your credit score is 3 digits, which helps lenders see your financial health and responsibility. But what does the average credit score look like across the country?
The average Canadian credit score typically hovers around 660 to 725, which falls in the “good” range on most scoring models. However, this number can vary by province, age group, and even income level. Understanding these variations can help you see where you stand compared to others and identify areas for improvement.
In this post, we’ll break down the factors influencing average credit scores in Canada, explore regional differences, and share tips for maintaining or improving your score that can help to obtain things like a personal loan or business loan. Let’s dive right in!
Credit scores vary widely across Canada, influenced by factors like location, age, and demographics. But as mentioned above, the average falls between 660 – 725. Provinces such as British Columbia and Ontario often rank highest in average credit scores, but in provinces like Newfoundland or New Brunswick, the income is typically lower which means credit scores also tend to be lower.
Age and demographic trends also play a significant role in credit score rankings. Older Canadians, particularly those aged 55 and up, tend to have higher credit scores, and this is because they’ve had years to build their credit history and likely don’t have as much outstanding debt. Younger generations, such as Millennials and Gen Z, often have lower scores due to shorter credit histories and higher debt-to-income ratios.
Canada’s provincial credit score trends reveal interesting regional dynamics across the country and it also shows how credit is treated in each province. Ontario and BC will typically have a very high score whereas, in places with lower incomes like the East Coast or in rural communities, you might see a lower average. Below is the average credit score for each province.
Several key factors influence the average Canadian credit score and it’s essential to understand exactly what these factors are.
Credit Utilization is a major factor in influencing the average Canadian credit score. If your credit utilization is below 30% it shows lenders that you manage credit responsibly. This is the biggest factor weighing on your score.
Are you a young adult or someone with a limited credit history? If your credit history is limited, you probably won’t have the best credit score but as you build your credit history over time, your score will likely increase.
If you miss a payment, this will impact your score. Now keep in mind, most credit card companies don’t report a late payment until 30 days after it’s due but you will likely be penalized by your card issuer or charged a late fee.
Now that we’ve gone over the average credit score for each province, let’s determine where you fall and what each credit category means.
If your credit score falls between 760 and 900, you’re in the excellent credit range. This status often results in more favorable loan terms and interest rates. The average FICO® Score in Canada was 762 as of April 2022, placing it within this category.
Scores ranging from 725 to 759 are considered very good. Individuals in this bracket are viewed as low-risk borrowers and typically have access to competitive credit offers.
A score between 660 and 724 is deemed good. While slightly below the national average, individuals in this range can still secure loans, though possibly at less favorable terms such as higher interest rates.
Scores from 560 to 659 fall into the fair category. Those here may face challenges obtaining credit and could encounter higher interest rates, similar to the above category.
A score below 560 is considered poor. Individuals in this range often struggle to qualify for credit and may need to take steps to improve their financial standing such as paying off excess debt.
The good news is that if you need to, improving your score is 100% doable and can be achieved with some hard work, budgeting, and of course, responsibility!
Improving your credit score takes consistency and strategy, no matter where you live in Canada. If you have poor credit, it will likely take years to rebuild. To rebuild your credit as fast as possible, follow these tips:
Across Canada, the average credit score tends to hover around 650 to 700 and this is considered a fair to good score, which means many Canadians fall into a range where they’re eligible for most loans, but may not always get the best interest rates. Aske mentioned above, credit scores can vary significantly from province to province, with some areas like Ontario and British Columbia seeing slightly higher averages, while others may be lower.
