Your credit score is an important metric that helps you qualify for financial products and achieve specific goals. It’s critical you understand how a credit score works, and how it impacts you. Want to get a travel rewards credit card? You’ll need a good credit score to qualify. In the market for a new car? A good credit score can help you qualify for the lowest rates on car loans and financing. Looking to buy your first home? Having a good credit score can help you qualify for the lowest mortgage rates that will help you afford your first home.

It’s a good idea to know what your credit score looks like before applying for credit cards, loans, mortgages, and other financial products. It’s also a good idea to understand how your credit score holds up compared to other consumers in Canada. According to a 2021 study from over 1 million Borrowell members, the average credit score in Canada is 667. 

A simple way to see how you fare compared to others in Canada is to compare your credit score to the average credit score of consumers in your city. In this article, we’ll share average credit score data from 20 major cities in Canada. We’ll also provide some insights on how you can improve your credit to help you reach your financial goals.

Which cities have the best credit scores?

To measure average credit scores for 20 different cities across Canada, Borrowell analyzed credit scores and Equifax credit reports from over 1 million Canadians in 2021. 

Borrowell’s data found that Markham, Vancouver, and Burnaby have the highest credit scores, while Moncton, Edmonton, and Hamilton have the lowest credit scores. Here are the average credit scores of consumers in 20 major cities in Canada, ranging from highest to lowest:

  1. Markham, ON: 715
  2. Vancouver, BC: 703
  3. Burnaby, BC: 697
  4. Toronto, ON: 694
  5. Victoria, BC: 691
  6. Montreal, QC: 690
  7. Mississauga, ON: 690
  8. Ottawa, ON: 685
  9. Surrey, BC: 668
  10. Quebec City, QC: 668
  11. Brampton, ON: 667
  12. Calgary, AB: 665
  13. London, ON: 665
  14. Halifax, NS: 658
  15. Winnipeg, MB: 657
  16. Saskatoon, SK: 656
  17. Regina, SK: 654
  18. Hamilton, ON: 653
  19. Edmonton, AB: 645
  20. Moncton, NB: 632

Out of the 20 cities listed above, 11 cities are above Borrowell’s average credit score of 667, while 9 are below the average credit score. Depending on where you live, the average credit score of your city may skew lower or higher than the average.

How are credit scores calculated?

Credit scores in Canada can fall anywhere between 300 and 900. The higher your score, the better. Credit scores are calculated based on information found in your credit report. There are five key factors that make up your credit score, and each factor impacts your score by a certain amount. Here’s a quick breakdown of these factors:

Payment history (35%): Your payment history is the largest factor that impacts your credit score. Your credit card, loan, and mortgage payments are all recorded on your credit report, as well as other bill payments (like phone and internet). A clean payment history will help you maintain a good credit score.

Credit utilization (30%): Your credit utilization measures how much credit you’ve used on credit cards and lines of credit (your balance) versus the total amount of credit available to you money you have access to (your total credit limit). Having a low credit utilization rate helps you maintain a good credit score.

Credit history (15%): Your credit history measures the overall age of your credit file and your individual credit accounts. When calculating credit history, credit bureaus consider which of your accounts has been open the longest, as well as the average age of all your credit accounts. Having at least two credit accounts open for a long time in good standing will help you maintain a strong credit score.  

Credit mix (10%): Your credit mix is the different types of credit accounts that make up your credit file. These accounts may include student loans, credit cards, car loans, and mortgages. Having multiple credit accounts with good payment history indicates that you have financial management skills.

Credit inquiries (10%): Credit inquiries are any time a lender or other company requests to “pull” or “check” your credit report. This happens when you apply for most financial products. Each time a lender makes a credit check, it’s recorded on your credit report and can temporarily impact your credit score. Too many credit checks can hurt your credit score. Checking your own credit using a service like Borrowell is considered a “soft” credit check and won’t impact your credit score.

Where can I find my credit score?

Your credit score is calculated by Canada’s two major credit bureaus: Equifax and TransUnion. You can request to access your credit score directly from Equifax and TransUnion, but the process can sometimes be time-consuming.

To save time and effort, you can use an app like Borrowell to check your credit score for free. Signing up for Borrowell takes less than three minutes and doesn’t require a credit card. Once you’ve signed up, you can check your credit score at any time, receive notifications when your credit score has changed, and monitor your credit score and credit report on a regular basis. 

How can I improve my credit score?

Is your credit score below your city’s average credit score? Don’t stress. There are specific steps you can take to improve your credit score. Here are some of the main steps you can start taking today to boost your credit score:

Pay your bills on time!

The number one thing you can do to improve your credit score is to pay your bills on time. If you have any outstanding bill payments, make those payments as soon as possible. Making bill payments on time is essential to improving your credit and maintaining a good credit score. 

To help you pay your bills in the future, you should set bill payment reminders on your phone. You could also use a bill tracker to get notifications about your upcoming bills. You could even automate regular bill payments, like your internet or cable bill, through your bank account or credit card.

Arrange payment plans for late bills

Because your payment history is the number one factor that impacts your credit score, you should avoid making late payments as much as possible. Sometimes, though, life happens, and you might need to deal with a payment you forgot to make. It’s not the end of the world, but you should contact your lender or service provider as soon as possible to arrange a payment plan. 

Arranging a payment plan with your service provider could help you get a grace period for your payment plan, giving you some wiggle room and some time to get your finances in order to pay the bill. 

Reduce your credit utilization by paying down your credit card balance

Reducing your credit utilization is a great way to improve your credit score in a relatively quick way. The golden rule is to keep your credit card utilization rate under 30%. If your credit card balance is more than 30% of your card’s credit limit, you should make an effort to reduce your balance by making a large credit card repayment. This could help you increase your credit score in a short period of time.

Increase your credit card’s credit limit 

If making a substantial credit card repayment isn’t doable right away, you have another option to reduce your credit card utilization. You can try reaching out to your credit card provider and request a credit limit increase. If managed responsibly, increasing your credit limit can help you improve your credit score. Maintaining the same credit card balance while increasing your credit limit will decrease your credit utilization. 

For example, if you increase your credit card limit from $3,000 to $4,000 while keeping your credit card balance at $1,000, then your credit utilization will decrease from 33% to 25%. It can be very tempting to splurge when you increase your credit limit, so remember to stay disciplined in order to reduce your credit utilization rate. 

Regularly review your credit report for errors

Downloading your credit report can help you understand what factors could be bringing your credit score down. By regularly reviewing your credit report, you’ll see what your credit accounts look like and how certain factors, like late payments or high credit utilization, could be impacting your score. 

Regularly checking your credit report can also help you spot errors that could be impacting your credit. If you believe there’s an error on your report (such as an incorrect late payment), you should contact Equifax and TransUnion to get that information corrected as soon as possible. Credit report error can occur, and disputing an error can be a relatively straightforward fix that can help you boost your score. 

Maintain an above average credit score to get the best rates

Now that you know what average credit scores look like across Canada, you can get a sense of how you fare compared to others. If your credit score is above average, that’s great news! This means that when you use an app like Hardbacon to compare credit cards and other financial products, you’ll have a better chance of qualifying for the best rates and perks available in Canada. If your credit score is below average, don’t stress just yet. You can use some of the tips shared above to improve your credit score. You can also use Borrowell to get personalized recommendations and coaching to get the credit score you need to reach your next financial goal.

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