Canadians’ personal finances continue to improve during the pandemic.
Government relief measures and lifestyle changes triggered by the COVID-19 pandemic have helped to lift the credit scores of Canadians nationwide, according to a new study by fintech company Borrowell.
The study found that the average credit score in Canada improved by 18 points over the past year, going up from a "below average" rating to a "fair" score of 667 points.
Missed payments during the same period decreased by 33%, from three missed payments per 10 consumers to just two missed payments. Borrowell defines a missed payment as any payment recorded on a credit report that is at least 30 days past due.
The findings suggest government aid programs are helping Canadians struggling due to the pandemic stay financially afloat, while cautious spending and better savings and debt repayment habits have allowed people with more stable finances to improve their credit scores.
However, the report also found that there is a huge disparity in the financial security of different segments of the population, with consumers who have low credit scores being 432 times more likely to miss bill payments than those in the highest credit score category.
The findings are a result of Borrowell’s analysis of over one million Canadians’ credit scores and reports going from the first quarter of 2020 to the same quarter in 2021. The scores were provided by credit reporting agency Equifax.
