Best apps to check credit score for free in Canada

Your credit score: one thing you can't bribe your way into improving — and life really sucks if you have a bad one. It’s one of the perks of adulting, though. You get to do fun things like monitoring your credit score and stressing out when it’s lower than you expected. All jokes aside, if you’ve found yourself wondering about the whole concept of credit scores and want to understand how to monitor it for free, this article is for you.

Here we will discuss what you need to know about your Equifax credit report and Transunion credit score report. Getting a credit report online is helpful but knowing how to read your credit report and understanding what your score means will help you monitor and track your credit history and health. Let's get started and see what the Canadian credit bureaus can show you about your financial health!

What is a credit score and why is it important to check it?

A credit score is a numerical value that tells lenders how likely you are to pay back the money you borrow from them. A good credit score increases your likelihood of getting approved for loans, credit cards, and lower interest rates. In other words, your credit score is more than just a number—it’s the key to unlocking major milestones and purchases in your life. The most common credit bureaus used are Equifax and Transunion. Knowing your Equifax credit score and what your Transunion credit score range is can help you plan for bigger expenses in your life.

It’s important to regularly monitor your credit score for several reasons. Doing so not only helps you understand your creditworthiness but also allows you to detect fraudulent activity on your credit report. Additionally, if your credit score is low and you’re taking steps to build your credit, frequent monitoring of your score will help you understand if the steps you’re taking are working or not. Your credit report is like a snapshot of your credit health and history as seen by the leading Canadian credit bureau officials.

People are slowly but surely waking up to the advantages of regular credit score tracking. According to a recent Equifax report, in 2021, 78% of Canadians checked their credit scores at least once a year, which is a stark contrast from five years ago when 67% of Canadians said they rarely or have never checked it.

How to check your credit score

Checking your credit score is just a matter of a few minutes—and there are a few options for you to choose from:

• A credit monitoring service: a credit monitoring service like Borrowell or Intuit Credit Karma will provide you with free weekly credit score updates. All you need to do is sign up for their service and download their app on your phone.

• Your financial institution: popular financial institutions in Canada such as RBC, Scotiabank, CIBC, and BMO provide you with your credit score through your account dashboard. You simply need to log into your account through their online banking portal to do so.

• One of the three credit bureaus: The Annual Credit Report website allows you to request a free credit report from each credit reporting bureau in Canada. The reason why most people don’t prefer this option is because you can only get a report once every twelve months from this website—so it’s not ideal for regular monitoring.

• Signing up for KOHO’s Credit Building service. It not only helps you build your credit history, it also gives you on-demand access to your credit score. Checking your credit report online and using KOHO's credit build services can help you protect your score and monitor payment history and other critical factors.

Don’t worry—checking your credit score or monitoring your credit report regularly doesn’t hurt it. It’s only when a lender does what is referred to as a “hard inquiry” when you apply for a new loan or credit card, or when a utility provider checks your credit report for rent or other service purposes, that you may see your credit score taking a hit. But this “hard inquiry” happens only after the lender or vendor has clarified the details of the check with you.

Free credit score checking apps in Canada

Three popular credit monitoring service providers let you check your credit score in Canada and allow you to get monthly free credit reports on their apps. They are:

1. KOHO

You can sign up for a KOHO account in less than five minutes, and with a 30 day trial you can check your credit score for free! Moreover, you get an updated score every month so you can monitor your credit history when you sign up for Essential, Extra or Everything. Also, checking your score with KOHO won’t negatively impact it, so no need to worry.

2. Borrowell

Borrowell provides users with a free credit score update and credit report from the major Canadian credit reporting agency, Equifax. In addition to your credit score, you’ll also get personalized tips to help improve your credit score as well as recommendations for various financial products and services, including loans and credit cards, based on your credit report. Borrowell also provides users with a range of financial education resources, including articles and blog posts on topics such as credit scores, debt management, and saving money, to help you make informed financial decisions and improve your financial literacy. Lastly, Borrowell offers a free credit coaching service, where users can get personalized tips and recommendations on improving their credit score from Molly, Canada's first AI-powered credit coach.

3. Intuit Credit Karma

Intuit Credit Karma provides users with a free credit score update and credit report from TransUnion, one of the major credit bureaus in Canada. Similar to Borrowell, Intuit Credit Karma gives you personalized product recommendations, financial education resources, and tips on how you can improve your credit score. Additionally, Intuit Credit Karma has recently come out with an update to their app that lets you opt in to receive alerts via email or push notifications whenever there is any activity or change in your report—for free.

4. Mogo

Similar to Borrowell, Mogo offers users a free credit score update and credit report from Equifax. Along with personalized financial product recommendations and financial education resources, Mogo offers a free identity fraud protection service. If there is any change to your credit report, Mogo sends you a notification within 24 hours to help you determine if it’s a valid change or if it’s a case of identity fraud. The only con of the Mogo app is that it’s not available to residents of Quebec.

Banks and Institutions to Check Credit Report With

That’s about the free credit score-checking apps in Canada. Now coming to banks and financial institutions. As we mentioned before, certain financial institutions that you bank with may also provide you with a free credit score update. Here are some examples:

1. Royal Bank of Canada

You can view what your TransUnion credit score is for free if you use RBC’s online banking service. All you need to do is log into your online banking account and scroll down to the “View Your Credit Score” option under the “Account Management” tab in the menu on the right-hand side.

2. CIBC

You can view your TransUnion credit score for free if you have an account with CIBC and if you use their mobile banking app. You can do so by selecting the “free credit score” option under the menu in your account dashboard.

3. BMO

BMO customers can use their Credit View service to check their TransUnion credit score for free. Simply sign in to online banking or the BMO mobile app, click on the “More” button, and select “My Credit Score” to go to the Credit View dashboard.

4. Scotiabank

If you have an account with Scotiabank, you can check your TransUnion score for free by going into your online or mobile banking account and registering for the TransUnion Credit Score tool.

What impacts your credit score?

Whether you are checking your Equifax credit report or looking at your free credit report from another resource, certain factors are used across the board to determine your credit rate and score. Five main factors that have a notable impact on your credit score and determine how your credit score calculated ends up. Whether you have a good credit score or a less-than-ideal score, in most cases any of the below-mentioned factors affect your credit score in the 30 to 60 days:

1. Credit utilization: credit utilization is expressed as the percentage of credit you’re using out of the total credit that’s available to you. So let’s say your total credit limit of all cards combined is $10,000 out of which you used $1,500, then your credit utilization becomes 15%. The lower your credit utilization, the better your credit score.

2. Credit inquiries: credit inquiries are often referred to as “hard checks” or “hard inquiries” and are done by a potential lender/landlord/utility provider to assess your creditworthiness. They can temporarily lower your credit score.

3. Payment history: this is perhaps the most impactful factor that affects your credit score. Consistently paying off your bills and credit card balances on time is a strong indicator of your creditworthiness, and speaks to your responsible credit behaviour—thus improving your credit score.

4. Duration of credit history: the longer you build your credit history, the more established your creditworthiness. This is why it's important to establish credit early and maintain it over time.

5. Types of credit: also known as the credit mix, the types of credit you have are an important indicator of your creditworthiness because it shows lenders that you can successfully manage different types of debt.

Best practices to improve your credit score

You know what they say about when life gives you lemons, right? Similarly, when life gives you a bad credit score, make smarter financial decisions.

According to the 2022 survey data from Borrowell, the average Canadian credit score is 672, which is up from 667 in 2021. Having a credit score above the annual benchmark will make it easier for you to get approvals for loans and credit cards. Here are a few things you can do to build your credit and improve your credit score:

1. Pay your bills on time

2. Don’t close your oldest credit accounts

3. Consider Credit Building products like KOHO

4. Pay down your credit card balance

5. Keep your credit utilization to 30% or less

To summarize, your credit score is like a plant. Ignore it, and it withers away. Nurture it, and it grows into something beautiful (and financially responsible).

Credit Building and Credit Checks from KOHO

Your credit history is a valuable asset that can significantly impact your financial options, including your ability to secure a personal or car loan in Canada. A good credit score not only makes it easier to obtain auto financing but also provides you with more favorable terms, saving you money in the long run. Even if your credit isn't perfect, there are steps you can take to improve your creditworthiness and increase your chances of getting the car loan you need. So, start today by managing your credit wisely and enjoying KOHO's credit building and new free credit score check options.