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Good credit is a valuable tool for anyone trying to get approved for any type of loan, credit card, housing, and job. But what is the average credit score by age, realizing that it takes years to build up a good credit score.

There is a big difference between the credit score of an 18-year old with their first credit card and a 30 year-old with 2 credit cards, a car loan, a mortgage, and a steady employment history.

While income and low or managed debt are also important factors,  good credit allows you to qualify for credit products more easily and access lower interest rates.

Having access to low-cost credit can help you save on different financial goals such as paying for higher education, buying a car or a house. Given the importance of your credit, it’s best to keep tabs on it and ensure its health. 

It can be tough to predict what your own credit scores will look like in the years to come. You could experience debt issues, job loss, or bankruptcy, no one can predict the future.

While it’s never a good idea to compare your finances to someone else’s, it can be beneficial to understand the average credit score Canadians have at your age range.  

Free Equifax credit score

What Are Credit Scores?

Canadian credit scores vary between 300 to 900 and represent your likelihood to repay debt on time. The higher your score the more likely you’ll get approved for credit and at lower interest rates too.

Your credit scores are 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. 

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 by the credit bureaus, lenders and other credit score providers to calculate your credit scores. Generally, the more positive information in your credit report, the more likely you’ll it’ll positively impact your credit scores. 

*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. 

What Qualifies As A Good Credit Score?

Canadian credit scores range anywhere from 300-900. The closer you are to 900, the better  your score is considered and the more likely lenders are to approve you. Most lenders will consider credit scores between:

  • 660 – 724: as good 
  • 725 – 759:  as very good 
  • 760 – 900: as excellent

Additionally, the better your credit scores are, the lower the interest rate those same lenders will offer you for the use of their products.

Canadian credit score ranges

How Does Credit Reporting Work?

In Canada, there are two main credit reporting agencies, TransUnion and Equifax. When you make a credit-related transaction, whether it’s good or bad, your lender reports it to whichever bureau they’re partnered with. Sometimes it’s both credit bureaus, while other times it’s one of them. Some lenders like payday lenders, simply don’t report to either credit bureau. 

 When a credit transaction is reported, it gets listed on your credit report for a predetermined number of years. Your credit scores then may fluctuate according to how positive or negative that transaction is. 

Average Credit Score In Canada By Age

According to Equifax Canada, one of Canada’s major credit bureaus, the average credit score amongst Canadians from 10 years ago to today has fallen in every age bracket but Generation Z (ages 18 – 25). On average, Canadians within the youngest age bracket (18 – 25) have a credit score of 692 while the oldest (65+) have a credit score of a little over 740. Data also shows that as age increases so does the average credit score number.

AgeAverage Credit Score
18 -25 692
26 – 35~697
36 – 45~710
46 – 55~718
56 – 65~737

Source: Equifax Canada consumer credit database

We speculate this may be due to the fact that it takes time to build credit. As you grow older, you start to build a credit profile with a variation of 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. Overall, Canadians seem to have a credit score of over 660 which is considered a good and healthy credit score.

What Does Age Have To Do With Credit Score Fluctuation?

Typically, the younger the age group, the lower their average credit scores are. However, this doesn’t necessarily mean that young borrowers are bad with money or irresponsible with their credit cards. There are several factors that can impact the calculation of your credit scores. 

Payment History (~35% of Your Score)

Payment history generally accounts for around 35% of your credit scores. So your payment history can impact your credit scores. While full-on-time payments may positively affect your credit, late or missed payments can have the opposite effect. 

However, as we said, younger people are not necessarily more likely to make irresponsible credit transactions than older people. But they may have a shorter payment history, which can also impact credit scores. 

However, at one point or another, we’ve all missed a few credit card payments, especially when we were in the 18-25 age group and were still learning how to use them properly. Before we discovered the benefits of things like online banking and automatic payments, that is. 

Debt-To-Credit Ratio (~30% of Your Score)

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 scores. It typically accounts for around 30% of your credit scores.  Generally, it’s recommended to keep a ratio of 30% or lower as higher ratio may negatively affect your credit. 

Age can affect your debt-to-credit ratio in two ways. One as a new credit user, you’re likely to qualify for lower credit limits than those who have a history of credit usage. As such, your ratio can be a lot higher than someone who has a higher credit limit, even if you’ve used the same amount of credit. 

 Moreover, Canadians in the younger age group generally have lower incomes than the older Canadians, meaning they’re likely to face more struggles paying off debt than those with higher incomes. However, it could also be because the older you get, the more significant your debts will become. After all, what’s a few hundred dollars worth of credit card bills, compared to a $350,000 mortgage?

Length of Credit History (~15% of Your Score)

Another factor, responsible for approximately 15% of your credit score breakdown, is the length of your credit history. This one is a particular game-changer for the average Canadian credit score, especially when it comes to the younger generation. In this case, the lowering of the average country-wide credit score is likely due to the younger crowd because of their collective lack of credit history. Plain and simple, the younger you are, the less lengthy your credit history will be. And, because your credit history is shorter, you won’t have had as much time to make responsible use of a variety of credit products, which can negatively impact your credit scores. 

New Credit (~15% of Your Score)

One area where the age issue can go either way has to do with the number of applications for new credit. As we’ve talked about in previous articles, another reason your credit scores can drop is when too many hard inquiries are being performed on your credit report. Hard inquiries occur when a lender pulls a copy of your credit report to determine your creditworthiness. Every time you receive a hard inquiry, your credit scores may be negatively affected. 

Public Records (10%)

Another factor, responsible for around 10% of your credit score, is the 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 scores to fall. 

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Credit Score Tips Based On Age Groups

As we said before, everyone’s financial journey is different, but there are few points in everyone’s life where some credit score advice is definitely 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 applied for as many types of credit products.  This can make creating a healthy credit history difficult. At this point in your life, it’s in your best interest to start creating some great 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. 

Ages 25-35

Around age 30 is when most people start getting married, buying cars, mortgaging houses or upgrading to more expensive apartments/condos, and having children. All of these avenues of life are likely to be the most expensive. Housing costs, for instance, 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 is in this age group where saving should jump to the top of the list of life’s priorities. It’s also at this point 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 overborrowing.  

Ages 45-54

The idea of retirement, though it’s not an actual possibility for most people of this age group, is probably on your mind at this point in your life. Generally speaking, by the time you’re in your mid-40’s, you should have learned to save and spend wisely. Moreover, most of your car loan and mortgage should be paid off. Your children probably have jobs of their own and may even be ready to move out and you should have invested a healthy amount of money into your RRSP.

Ages 55+

By this point in most people’s lives, the car and the mortgage are paid, and their children have careers, families, and lives of their own. Many people of retirement age sell their houses and downsize to a comfortable condo or assisted living facility. Lots of retirees even move to areas with warmer climates, where heating and other such utilities become less expensive.

All things considered, when you’re rounding this age, there should be fewer expenses to cover. While good credit scores are definitely beneficial, you’ll probably be more focused on continuing to save for retirement as well as creating a plan to make sure that money lasts as long as you need it to. 

Average Credit Scores By Age In Canada FAQs

What if my credit score is lower than my age group? 

Everyones financial circumstances are different. While it’s interesting to know how you compare to your age group, it shouldn’t discourage you. In general, you should always try to have good credit (660+), this will allow you to easily access different credit products with low rates and flexible terms. 

Which age group has the highest credit score?

The average credit scores increase with age. This is generally because older Canadians have had more time to develop a credit history and access different types of credit. Currently, Canadians aged 65+ have the highest average credit score of approximately 750.

How can I increase my credit score?

There are numerous factors that affect the calculation of a credit score. The credit scoring model used and the information reported to the credit bureaus are two of the main factors that affect your credit scores. In general, credit information such as your payment history, debt-to-credit ratio, credit history, credit inquiries, and public records all have the ability to affect your credit scores. Paying your bills on time and in full and lowering your credit utilization ratio are two basic ways that can help improve your credit. 

Bottom Line

Good credit is one of the best things you can use in your day-to-day life, no matter what age group you fall into. Not only can a high score help you get the credit products you need, it also helps you save money in interest, money that can come in handy later in life. So, for the sake of your financial well-being, it’s best to start building healthy credit early on and maintain it throughout the years.  

Bryan Daly avatar on Loans Canada
Bryan Daly

Bryan is a graduate of Dawson College and Concordia University. He has been writing for Loans Canada for five years, covering all things related to personal finance, and aims to pursue the craft of professional writing for many years to come. In his spare time, he maintains a passion for editing, writing screenplays, staying fit, and travelling the world in search of the coolest sights our planet has to offer.

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