Many Canadians Concerned about their Financial Future are Confused about Credit System
26 Ottobre 2021 - 11:00AM
The pandemic continues to weigh on the financial outlook of
Canadians with two-thirds (64 per cent) checking their credit
reports in the past year and 26 per cent within the past month
according to a recent consumer survey conducted by Equifax Canada
in advance of Financial Literacy Month. This is a major shift
considering 78 per cent of survey* respondents indicated they have
now checked their credit reports at least once versus a similar
Equifax survey conducted five years ago when 67 per cent said they
‘rarely or never checked their credit reports’.
When asked to reflect on COVID-19 and their current financial
situation, 61 per cent of Canadians said they are concerned about
being able to live comfortably in retirement. More than half (54
per cent) admit they are concerned about their investments, while
42 per cent are concerned about paying off debt and about one-third
are concerned with paying monthly bills (37 per cent), job security
(34 per cent), credit scores/reports (33 per cent), and are worried
about the federal support programs ending (32 per cent).
“While there are still a lot of worried people, it’s encouraging
that consumers are taking the time to better understand their
relationship with credit,” said Julie Kuzmic, Equifax Canada’s
Senior Compliance Officer, Consumer Advocacy. “We’re certainly
seeing more people checking their credit reports and scores now
compared to a few years ago, but there’s still a lot of
misunderstanding about how credit scores are calculated and what
information goes into a credit report.”
Younger adults (between the ages of 18-34) are more likely to
check their credit reports versus those over the age of 35. Of
those who have checked, the top reason for doing so is to ensure
that their information is correct (56 per cent). Despite checking
these reports and scores more frequently, younger adults are less
likely to have a full understanding of how credit reports and
scores work. They are also less likely to correctly identify false
statements related to a credit report and scores compared to those
over the age of 35.
PUTTING CANADIANS TO THE TEST ON THEIR CREDIT
When presented with a series of false statements about credit
scores and reports, a significant number of survey respondents of
all ages agreed with the following false statements:
|
% Agree it’s a False Statement |
False Statement |
General Population |
Adults 18-34 |
If you have a good credit score, you always get approved
for a loan |
48% |
49% |
Credit bureaus decide whether or not you qualify for a
loan |
43% |
49% |
You have one credit score |
40% |
50% |
Higher salaries result in better credit
scores |
22% |
30% |
Checking your own credit reports hurts your
credit scores |
20% |
28% |
People who avoid using credit have higher credit
scores |
14% |
21% |
Married people have a joint credit report |
13% |
21% |
Credit reports contain RRSP balances |
10% |
19% |
Younger adults, however, did score better when presented with
true statements about credit scores and reports, correctly
agreeing:
|
% Agree it’s a True Statement |
True Statement |
General Population |
Adults 18-34 |
Credit reports do not contain credit scores |
14% |
18% |
Missing a credit card payment can stay on a credit report
for up to 7 years |
46% |
53% |
PUTTING THE CREDIT SCORE TO USE
It is good news that Canadians are checking their credit
scores more. For people with credit scores less than about 750 out
of 900, the next step should be to understand how to improve those
scores over time. Lenders generally consider anyone above 750 to be
a lower risk to default on their payments. Small behaviour changes
like paying bills on-time every month can have a positive impact on
credit scores and improve an individual’s likelihood for better
loan terms, including lower interest rates..
“Our credit counsellors talk to people every day who are unaware
of the impact of their behaviour on their credit scores,” said
Bruce Sellery, CEO of Credit Canada. “Sometimes late payments are
unavoidable due to job loss, illness or family difficulties. But
sometimes more knowledge about the consequences of late payments,
frequent credit applications, or maxing credit cards to the limit
can help improve the day-to-day choices people make. We need to
pull together during these difficult times. Working with Equifax
Canada, we’re eager to help more people understand their credit
scores and how to improve them.”
To learn more about how credit works, consumers are encouraged
to visit Equifax Canada’s education hub. The site offers insights
on how different actions may affect credit scores and provides
resources to help them improve their financial wellness.
*An online survey of 1,500 Canadians was completed between
September 16-24, 2021, using Leger’s online panel. The margin of
error for this study was +/-2.5%, 19 times out of 20.
About EquifaxAt Equifax (NYSE: EFX), we believe
knowledge drives progress. As a global data, analytics, and
technology company, we play an essential role in the global economy
by helping financial institutions, companies, employees, and
government agencies make critical decisions with greater
confidence. Our unique blend of differentiated data, analytics, and
cloud technology drives insights to power decisions to move people
forward. Headquartered in Atlanta and supported by more than 12,000
employees worldwide, Equifax operates or has investments in 25
countries in North America, Central and South America, Europe, and
the Asia Pacific region. For more information,
visit Equifax.ca and follow the company’s news
on LinkedIn and Twitter.
About Credit CanadaCredit Canada is a not-for-profit credit
counselling agency providing free and confidential debt
and credit counselling, personal debt management, debt
consolidation and resolutions, as well as preventative
counselling, educational seminars, and free tips and tools in the
areas of budgeting, money management, and financial goal-setting.
Credit Canada is Canada’s first and longest-standing credit
counselling agency and a leader in financial wellness, helping
Canadians successfully manage their debt since 1966. Please
visit www.creditcanada.com for more information and follow us
on Facebook and Twitter.
Media Contact:Andrew
FindlaterSELECT Public Relationsafindlater@selectpr.ca(647)
444-1197
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/7ff91973-5511-4943-bd45-1efc75ac42f7
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