Why do Canadians care so much about credit scores? For a country where people still use paper cheques for payments like it’s 1800s and basic banking functionality is treated as an exotic edge case or science fiction that is uniquely impossible in Canada despite being possible everywhere else, the number of products around tracking and improving credit score seems absurd.
A credit score is just an internal way for lenders to assess your risk. And if you are not missing payments, you are probably fine. So what do you need a high credit score for?
Is there any practical advantage to achieving and maintaining a very high credit score? If so, what is it?
Is this a social status thing? If so, where and how is one supposed to brag about it?
Thanks for the post, @Paul. I’ll do my best to respond based on my experience and research into the Canadian market.
First, to answer your question: No, I don’t think it’s a status symbol. Respectfully, if you try to brag about an 850 credit score at a dinner party, people won’t be impressed, they’ll just think you’re a nerd (or a lender).
Are Canadians obsessed with credit scores? Perhaps, and here is why it’s often a practical necessity:
The Mortgage “Tax”: Canada is a mortgage-heavy economy. The difference between a “good” score and an “excellent” one can be $0.5% or $1% on a mortgage rate. Over a 25-year amortization on a $500,000 loan, that gap represents tens of thousands of dollars.
The Rental Gatekeeper: In competitive housing markets, landlords use scores as a “character filter.” If 20 people apply for one suite, many landlords will simply bin any application under 700. While a score doesn’t tell a person’s full story, it is the primary shorthand for financial reliability.
Insurance Premiums: In many provinces, auto and home insurance companies use credit-based insurance scores to determine your premiums. A lower score often means you pay more for the exact same coverage.
Employment Screening: For roles in finance, government, or those involving fiduciary responsibility, a poor credit score can actually result in a rescinded job offer during a background check.
The Bottom Line:
As you mentioned, “not missing payments” keeps you in the game, but maximizing your score (760–800+) is what moves you from the surviving category to the preferred category.
I’ll also add that historically in Canada, big banks were terrible at giving us our own data, hence why we see the explosion of apps like Credit Karma or Borrowell. These apps were able to gamify a previously “black box” system.
When I was looking for a mortgage it was the same rate for anything above 660. Credit cards also don’t give better rates for higher credit scores. I’m not sure where else one might need a credit score. If you’re not buying a phone outright you’re either approved or not.