New survey finds nearly half of Canadians are unsure how credit scores are calculated

A new survey reveals nearly half of Canadians have not sought any form of financial advice in the last six months.

A new survey from Capital One Canada found 49 per cent of Canadians are unsure of how credit scores are calculated.

Despite data from Statista suggesting Canada has one of the highest rates of credit card ownership in the world, the survey found Canadians’ financial literacy has gaps when it comes to credit scores and Buy Now, Pay Later (BNPL) services.

“We believe that many Canadians want to make smart financial choices but our survey shows that they may not always have access to the right information,” says Becca Mintz, vice president and head of credit and data at Capital One Canada.

Out of the 1,600 Canadians who responded to the survey, 40 per cent have not sought any form of financial advice in the past six months and 41 per cent believe using 80 per cent of their credit card limit, even when paid off on time, increases their credit score.

Other findings from the survey showed that 32 per cent of Canadians believe using BNPL services will decrease their credit score, while 30 per cent didn’t know BNPL had any impact on their score.

Thirty per cent of Canadians believe their income affects their credit score and 26 per cent believe carrying a balance on a credit card from month to month decreases or has no impact on a credit score.

Wendy Brookhouse, founder of Black Star Wealth said it’s important to seek financial help as soon as possible to gain more financial literacy.

“I feel if you get a professional on your side right from the get-go, you’re actually going to solve that problem a lot faster and easier than you think, because sometimes you just need that second set of eyes on it that has seen these situations before,” Brookhouse said.

Additionally, Brookhouse said things like debt and bill payments can put pressure on Canadians, so seeking help financially and creating a plan can help alleviate those worries.

“The number one stressor on money is debt and bill payments. And yet those people who have worked with a financial planner and have a plan are significantly less stressed and less worried about the future, because they’ve actually talked to professional about that. So, it does make a huge difference in the long term about how you feel about it,” she said.