This post covers the best credit score apps in Canada for anyone interested in monitoring your credit score and credit report.
Your credit score is one of the most important numbers in your life. It can determine your ability to get a loan, a mortgage, or a car lease. It can also affect the interest rates you are offered on these things.
That’s why it’s important to track your credit score and report regularly. Fortunately, there are several credit score apps in Canada that can help you do this.
In this blog post, we will discuss the best credit score apps in Canada, how credit scores are calculated and why it is important to monitor them regularly!
Borrowell is a top-rated credit score app in Canada founded in 2014. The app was the first to offer a free credit score service in Canada and has managed to attract over 1.5 million users since then.
Free credit score and credit report
Interest-free cash advance to prevent NSF
Financial products recommendations
AI-powered credit coach
COST Free CREDIT BUREAU Equifax
Borrowell offers free weekly credit monitoring features, and also helps you manage your overall financial health with customized financial products.
The free credit score and credit report provided to Borrowell users are based on Equifax’s proprietary model.
You can download the Borrowell app on Google Playstore or App Store, but you can access all of its features through your web browser without an app too.
- Credit score and monitoring services: Get free weekly credit score and monitoring services based on Equifax’s proprietary model.
- Credit Coach: Borrowell provides credit coaching through Molly. Molly is an artificial intelligence that helps improve your credit score by offering customized tips based on your credit profile.
- Cash advance: Get a $75 interest-free cash advance towards your forthcoming bill payments.
- Bills tracking: Track your forthcoming bills and forecast your future account balance in one dashboard.
- Financial products: Get access to multiple financial products recommended based on your credit profile. Borrowell recommends bank accounts, credit cards, loans, mortgages, insurance and investment products.
Learn more: Borrowell Review
2. Credit Karma
Credit Karma is another popular credit score app that provides Canadians with access to their TransUnion credit score and credit report at no cost.
Besides credit scores and reports, you can also access personalized credit recommendations, financial products and educational materials on Credit Karma.
With 100 million customers across different countries, Credit Karma is one of the best free credit score apps in Canada that has been downloaded by more than 500,000 Canadians.
The app is available for download on Google Playstore and App Store respectively.
- Credit score and report services: Get free access to your TransUnion credit score and reports each week.
- Credit education: Get access to a wide range of free educational materials on how to improve your credit score from credit building to budgeting.
- Financial products: Based on your credit profile, Credit Karma will recommend personalized financial products ranging from loans, mortgages and credit cards.
Mogo is one of Canada’s free credit score apps founded in 2003. Through the Mogo app, you can access free monthly credit scores and monitoring services from Equifax.
In addition to free monthly credit score service, Mogo also offers identity fraud protection, cashback prepaid Visa debit card, Bitcoin, loans and mortgages.
With the exception of Quebec, Mogo is available in all parts of Canada, attracting more than 1.6 million users since its inception.
That said, the Mogo app is also available on both Google Playstore and App Store.
- Credit score and reports services: Get free monthly credit score and reports based on Equifax’s proprietary model.
- Credit card protection: Enjoy a 90-day free credit card protection when you create a Mogo account or unlimited protection when you activate MogoCard.
- Credit education: Get practical tips on how to improve your finance through the Mogo MoneyClass based on your budgeting, savings and investing.
- Financial products: Access your favourite financial products in one package ranging from prepaid Visa debit card, Bitcoin, loans and mortgages.
What is Credit Score?
Your credit score is a three-digit number that ranges from 300 to 900 and is calculated using the information in your credit report. The higher your score, the better your credit rating and the more likely you are to be approved for loans and other lines of credit.
All things being equal, a person with a higher credit score will likely receive a lower interest rate on a loan than someone with a lower score.
Your credit score is based on five factors: payment history, amount of debt, type of debt, length of credit history and new credit inquiries.
How Credit Scores are Calculated in Canada
The above best credit score apps calculate your credit score differently based on the credit bureaus they use. Generally, each of the credit bureaus calculates your credit score using the information available on your credit report.
And the information in your credit report is built up over time as lenders and other financial institutions report your credit-related activities to both Equifax and TransUnion.
That is, Equifax and TransUnion are notified when you apply for new credits, make payments, miss payments, close a credit and so on.
However, each of the credit bureaus has its own distinct proprietary models used to calculate your credit score. For example, TransUnion uses a scoring model called VantageScore while Equifax calculates its own scores using the Equifax Risk Score.
To further complicate things, each credit bureau also has different variants of its credit scoring models. For instance, Equifax has ERS 2.0 (used by Borrowell), ERS 1.1, BEACON 4.0 and more.
Nevertheless, the key factors that credit bureaus use to calculate your credit score are well-known and with their usual weights shown below.
1. Inquiries on Your Credit
A credit inquiry is a request made by a potential lender to view your credit report in order to determine your creditworthiness. Inquiries can also be made by employers, landlords, and utility companies.
There are soft and hard inquiries. Soft inquiries don’t usually impact your credit score but hard inquiries do.
2. Your Credit Mix
Credit mix is also one of the factors used to calculate your credit score. Your credit mix is the variety of types of credit you have.
The most common type of credit is revolving, which includes credit cards. Other types include instalment loans, such as auto loans and student loans.
A good mix of different types of credit can help improve your score because it shows that you can manage different types of debt.
3. Length of Your Credit History
A longer credit history will help improve your credit score because it provides more evidence that you can responsibly manage credit. The length of your credit history is 15% of your total credit score, so it’s important to keep all of your accounts open and active for as long as possible.
As a result, your credit history length will affect you negatively when you’re just starting out. Unfortunately, there’s nothing you can do about it. Luckily though, you can focus on the other factors within your control like credit utilization and payment history.
4. Credit Utilization
Credit Utilization, which is the second most important factor in your credit score, is the percentage of your credit limit that you’re using.
For example, if you have a $1000 limit on your credit card and you’re carrying a balance of $500, your credit utilization would be 50%.
It’s important to keep your credit utilization low because it signals to lenders that you’re not over-extending yourself financially. A good rule of thumb is to keep your credit utilization below 30%.
You can improve your credit utilization by: paying off balances on time, keeping balances low, requesting a higher credit limit from your lender and more.
5. Your Payment History
Your payment history is the most important factor in your credit score, making up 35% of the total. This is why it’s so important to always pay your bills on time. A single late payment can cause your credit score to drop by 100 points or more.
There are a few things you can do to make sure you never miss a payment:
- Set up automatic payments
- Keep track of due dates in a calendar or budgeting app
- Sign up for text or email alerts from your lender
Learn more on how credit scores are calculated and interpreted.
Why is it important to track your credit score?
Your credit score is a reflection of your creditworthiness and plays a major role in determining whether you’ll be approved for a loan or not.
It’s important to track your credit score regularly so that you can identify any potential problems early on and take corrective action.
Here are some of the reasons why you should monitor your credit score regularly:
- Catch and correct errors sooner: By monitoring your credit rating, you can catch any errors or fraudulent activity early and take steps to improve your score.
- Get the best rates: By staying on top of your credit rating, you can make sure that you always have access to the best rates and deals available
- Save money: Regularly checking your credit score can help you save money by ensuring that you always have the most favorable terms and conditions.
- Build good habits: Monitoring your credit score regularly can help you develop good financial habits that will benefit you in the long run.
Learn more: 7 Ways to Improve your Credit Score fast
FAQs on the Best Credit Score Apps in Canada
There’s no single accurate credit score app out there as different apps employ different scoring models. Thus, you can’t make the wrong choice with Borrowell, Credit Karma or Mogo.
You can check you create a score for free in Canada through Borrowell, Credit Karma or Mogo.
This is expected since Equifax and TransUnion utilize different scoring models. The Equifax Risk Score is the scoring model of Equifax and the VantageScore is the scoring model of TransUnion.
Both Equifax and TransUnion offer accurate credit scores based on their distinct scoring models. As such, you can monitor your credit score and reports using either one.
That brings us to the end of this article. Hopefully, you now know the best credit score apps in Canada and how they work.
The bottom line is that you can’t make the wrong decision with any of the credit monitoring services above as they all offer accurate scores and reports.
But if you’re looking for more frequent updates, choose between Borrowell and Credit Karma as they provide weekly updates.
For 24/7 updates, especially if you’re a victim of fraud or identity theft, you may need to sign up for paid services from TransUnion or Equifax.
Kindly explore our existing blog posts to learn more about other financial products and services that will improve your credit score in Canada.