Canadians’ credit health improved during the second quarter of the year, with average credit scores rising across the board for those with and without mortgages, and new home-loan borrowers, according to the latest study by the Canada Mortgage and Housing Corporation (CMHC).
Of the three groups, credit scores of borrowers with existing mortgages were the highest.
"Credit scores for consumers with an existing mortgage and those with a new mortgage have been improving over the past four years, signalling perhaps that tighter mortgage rules are having some of their intended effects in favouring consumers with stronger credit health," said Anne-Marie Shaker, senior analyst at CMHC.
While borrowers without mortgages still have high credit scores, their ratings worsened slightly during the same period. This could suggest that they are having a harder time paying off debt than those currently with home loans.
"A higher share of consumers with a less stable financial situation falls in the ‘consumers without a mortgage’ category, indicating this group's greater difficulty in paying off debt," Shaker said.
Despite this, the shares of consumers who experienced a credit score degrade remained small and stable over the last year, sitting below 5% for consumers without a mortgage and below 3% for consumers with a mortgage.