Good credit is a valuable tool for various reasons, including applying for a credit card, taking out a mortgage, or even getting a job. But your age may play a role in your credit health. It can be beneficial to understand the average Canadian credit score by age, and how your age may affect what your score currently is.
Key Points
- The average credit score tends to increase with age.
- With age, consumers have more time to build credit history, increase their income, and pay down their debt.
- A higher credit score may afford you with more financial products and lower interest rates.
What Is The Average Credit Score In Canada By Age?
According to Equifax, the average credit score amongst Canadians from 10 years ago to today has fallen in every age bracket but Generation Z (ages 18 to 25), the youngest age bracket. On average, Canadians within this age group have a credit score of 692, while those in the oldest age bracket (65 and over) have a credit score of a little over 740.
Data also shows that as age increases, so does the average credit score number:
| Age | Average Credit Score |
| 18 -25 | 692 |
| 26 – 35 | ~697 |
| 36 – 45 | ~710 |
| 46 – 55 | ~718 |
| 56 – 65 | ~737 |
| 65+ | ~750 |
This is likely due to the fact that it takes time to build credit. As you grow older, you start to build a credit profile with various financial products and your length of credit history increases.
These two factors are key components that help establish your credit scores. So, it makes sense that the average credit score increases with age. Based on these figures, Canadians seem to have credit scores over 660, which is considered good credit.
| What Are Credit Scores? Canadian credit scores vary between 300 and 900 and represent your likelihood to repay debt on time. Your credit score is calculated based on the information in your credit report. Depending on the information in your credit report and the credit scoring model used, you can have different credit scores. |
What’s The Average Credit Score In Canada?
According to a Borrowell study, the average Canadian credit score was 672 as of 2022. In contrast, the Fair Isaac Corporation (FICO), the average FICO® Score in Canada stood at 762 as of April 2023.
What’s Your Credit Score? Get Your Credit Score For Free
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What Qualifies As A Good Credit Score?
Canadian credit scores range anywhere from 300 to 900. The closer you are to 900, the better your score is considered, and the more likely lenders are to approve you for loan products at lower rates. Most lenders will consider credit scores between:
- 660 – 724: ‘Good’ credit
- 725 – 759: ‘Very good’ credit
- 760 – 900: ‘Excellent’ credit
How Do Credit Scores Work?
To build yourself a better mental picture, think of your credit products (credit cards, loans, lines of credit, etc.) as your school classes. What happens when you do your homework on time and ace your tests? You get a better grade at the end of the semester.
On the other hand, if you don’t do your homework and don’t study, you may see your grades getting lower. Next? All your grades get combined to form your GPA. The higher your GPA is, you’re more likely to get into the program you want when you apply at universities and other schools.
There’s a similar occurrence when it comes to your credit scores. If you make responsible credit-related transactions, like paying your bills on time and in full, that information is reported to the credit bureaus*. This information is later used to calculate your credit score. Generally, the more positive information in your credit report, the more likely that your credit score will be positively affected.
*note: Not all lenders and creditors report your credit information to the credit bureaus. Some will report to both, while others may report to one or none.
Credit Score Tips Based On Age Groups
As we said before, everyone’s financial journey is different, but there are a few points in everyone’s life where some credit score advice is needed.
Ages 18-24
Younger Canadians don’t usually have a very long credit history, as most have recently gotten their first credit product or haven’t yet applied for as many types of credit products.
At this point in your life, it’s in your best interest to start creating some healthy financial habits and only use the amount of credit you can afford to pay back. That will help you build the credit you need down the line for when you decide to apply for larger and more expensive lending products.
Since it may be more difficult to get approved for credit products with limited credit history, consider applying for a secured credit card. They’re relatively easy to get approved for, and every timely payment you make is reported to the credit bureaus, which can help you build good credit.
Ages 25-34
Young adults may start leaving their parents’ homes and start living on their own. This may also be around the age group that the average Canadian gets married.
While it may still be difficult to get approved for a mortgage to buy a home given soaring housing costs in Canada these days, many young adults may choose to rent. At this point, it may be wise to consider using a service that allows your rent payments to be reported to the credit bureaus.
Rent payments are typically not reported. But with services like Landlord Credit Bureau (LCB) or City Lending Centers (CLC), you can use your rent payments as a way to build good credit.
Ages 35-44
The average age of first-time home buyers in Canada is 36 years old. Transitioning from renting or living in your parent’s house to buying your own home is a huge financial step. Housing costs have been rising all across Canada. And, of course, if you have children they won’t become self-reliant, financially speaking, for quite some time.
It’s in this age group where saving should jump to the top of the list of life’s priorities. It’s also at this point that you’ll want to have developed a healthy credit score, as you’ll need access to different loans at the best rates. You should also start thinking about paying down any consumer debt you might have and ensure you’re not over-leveraging yourself by taking out too many loans and credit products.
Ages 45-54
By the time you’re in your mid-40’s, you should have learned to save and spend wisely. Using a budgeting app and making wise spending and saving decisions can go a long way in helping you build a good credit profile and a healthy financial cushion.
At this point (and ideally even earlier), you should be thinking about saving for retirement. There are several ways to do this, including contributing to your RRSP account every year to ensure you have enough money to retire comfortably.
Ages 55+
Once you reach this age, your car and mortgage should be paid off. Of course, this may be easier said than done, especially with the rising costs of living compared to the more sluggish wage increase pace.
To help with this issue, many people of retirement age sell their houses or downsize to reduce housing costs. All things considered, when you’re nearing this age, there should be fewer expenses to cover. While good credit scores are still beneficial, you’ll probably be more focused on continuing to save for retirement to make sure that money lasts as long as you need it to.
If your score falls under these ranges, you may have trouble getting approved for loan products with traditional lenders. In this case, you may have to apply for a loan with an alternative lender who works with bad credit borrowers.
What Factors Impact Your Credit Score?
There are several factors that can impact the calculation of your credit scores.
Payment History (~35%)
Payment history generally accounts for around 35% of your credit score calculation. While on-time payments may positively affect your credit, late or missed payments can have the opposite effect.
Debt-To-Credit Ratio (a.k.a. your credit utilization ratio) (~30%)
The amount of revolving debt you carry versus how much credit you have available also plays a key role in the calculation of your credit score. It typically accounts for around 30% of your credit calculation. Generally, it’s recommended to keep your debt-to-credit ratio (a.k.a. Your credit utilization ratio) at no more than 30%, as a higher ratio may negatively affect your credit.
Length of Credit History (~15%)
Responsible for approximately 15% of your credit score breakdown is the length of your credit history, which is how long your credit accounts have existed. This factor typically includes both the age of your oldest and most recent accounts. Generally speaking, creditors prefer to see that you’ve responsibly handled your credit accounts over a long period of time.
Credit Inquiries (~10%)
When your credit file is accessed, this is noted on your file as a credit inquiry. That said, the only inquiries that affect your credit score are ‘hard inquiries’, which refer to credit checks conducted by entities like creditors and lenders. These credit inquiries account for roughly 10% of your credit score calculation.
That said, ‘soft inquiries’ don’t affect your credit. These inquiries can be done by yourself or by others to get a basic idea of your creditworthiness.
Public Records (10%)
Accounting for around 10% of your credit score is public records. This includes information about any credit accounts in collections, bankruptcies, consumer proposals, lawsuits, and other derogatory remarks. Negative information such as these can cause your credit score to fall.
Bottom Line
Good credit is an important goal to achieve in your financial life, no matter what age group you fall into. A high score can help you qualify for the credit products and interest rates you want. Given the importance of your credit score, it’s best to start building healthy credit early on and maintain it throughout the years.
