Canadians show higher credit scores during the pandemic

The recent report by Borrowell shows that COVID-19 relief measures and changes in everyday habits caused by the pandemic may have led to credit score increases all over the country.

According to Borrowell, the average credit score in Canada was up by 18 points over the previous year, rising from the “below average” mark to a “fair” one and reaching 667 points.

In addition to it, the number of missed payments during the same period fell by 33%. It’s important to note that Borrowell defines a missed payment as any payment mentioned on a credit report that is at least 30 days past due.

Such results show that the government aid programs are really helping Canadians who are facing financial difficulties. Combined with a more careful spending and better lifestyle habits, it may have helped consumers with a more stable financial situation to improve their credit score.

At the same time, the report also points to a significant gap in the financial security between various segments of the population. It turns out that consumers with low credit scores are 432 times more likely to miss their payments than those who have high scores.

“It’s obvious that consumers with low credit scores have faced stronger challenges during the previous year than others,” – Borrowell CEO Andrew Graham noted.

The results are based on Borrowell’s analysis of more than one million Canadians’ credit scores and reports during the period from the first quarter of 2020 to Q1 of 2021. The data was provided by Equifax.

We want to remind that maintaining perfect credit rating is crucial for your mortgage approval. For more tips on how to do it and what affects your credit score the most please read about multiple credit inquiries in our recent article.