Study Finds Most Canadians Have Never Checked Their Credit Score
23 June 2015
If you’ve checked your credit score even once, you’re already ahead of the majority of Canadians when it comes to financial awareness. An alarming new study from the Bank of Montreal showed that 56 percent of Canadians have never checked their credit score, leaving them unaware of their own potential to get a loan or qualify for a lease or mortgage.
Even among those who had checked their score in the past, checking regularly was highly uncommon. Only 14 percent of survey respondents said that they checked their score at least once a year. Younger respondents were more likely to say they checked their scores regularly, but even among millennials, only 20 percent revisited their scores every year.
These numbers represent a lack of understanding of basic credit concepts among the Canadian population at large. Fifty-two percent of Canadians don’t know how high a credit score has to be to be considered good, and 21 percent believe that scores under 600 are good, when the actual range is 680 and up. Even more bewildering is the fact that one-fifth of respondents believe that checking their credit score can lower it.
Not only do many Canadians lack basic knowledge about credit scores, they also feel that they don’t know enough about how to improve them. Even millennials, who were the most knowledgeable generation surveyed, were likely to say they didn’t know how to achieve and maintain a good credit score, with 35 percent saying they lacked this knowledge.
“A poor credit rating results in significant financial limitations - everything from being approved for a loan to renting an apartment. A financial advisor can help advise you on the factors and behaviours that can build or maintain a good credit score,” Bank of Montreal Regional Vice President Tony Tintinalli said in the company’s report on the survey.
A variety of factors go into determining one’s credit score. Keep in mind the following:
- Pay all bills on time. A main factor used in calculating your credit score is your history of payments. Make sure you keep track of when your bills are due each month and submit payment on time. If your credit score is currently low due to a history of late payments, making on-time payments over a period of time will help it come back up to a better level.
- Don’t close delinquent or unused accounts. Some people think that if they just close accounts they’ve gotten behind on, they’ll be erased from their credit record, but that isn’t the case. The credit bureaus also use your history of maintaining open accounts to determine your score, so closing an account might end up lowering your score.
- Check your credit report every year. You can order your score for free once a year from each of the two credit reporting bureaus, so take advantage of that opportunity to keep track of your credit.
Signing up for a credit monitoring service can also help you keep track of certain changes in your credit file.