Renters’ Credit Scores on the Rise

A recent industry report has highlighted a surprising shift: the average credit score of Canadian renters is now on par with the minimum requirements set by major banks for mortgage approvals. This development is seen as a positive step for first-time buyers who often face credit barriers when transitioning from renting to homeownership.

Credit scores in Canada generally range from 300 to 900, with a score of 660+ considered “good”. According to the report, renters—who historically averaged lower credit scores due to tighter budgets and lack of asset-building opportunities—have now pushed their average above the minimum bar for mortgage consideration.

Experts suggest this trend is partly due to renters making more responsible use of credit products, increased financial literacy campaigns, and broader awareness of how credit scores impact borrowing power.

The Affordability Catch

Even though renters’ credit scores are stronger, housing affordability remains a major roadblock. Rising home prices, coupled with higher interest rates since 2022, mean that many households still cannot qualify for the size of mortgage needed to buy even modest homes in urban centres.

For example:

In Toronto and Vancouver, the benchmark home price remains well over $1 million, requiring an income level far beyond what most renters can demonstrate.
Even in mid-sized cities like Calgary or Halifax, rapid price growth since the pandemic has outpaced wage increases.

This means that while credit access is less of a problem than before, income and affordability remain the biggest hurdles.

Banks’ Lending Standards

Most Canadian banks require:

A minimum credit score of 600–650 to qualify for insured mortgages.
Debt-service ratios (GDS/TDS) within CMHC guidelines.
Stable proof of income, such as employment or self-employment records.

With renters now reaching these credit benchmarks, banks may see a larger pool of mortgage applicants. However, the “stress test” rules introduced in 2018 still require borrowers to qualify at 2% above the offered mortgage rate, which continues to disqualify many.

What This Means for Renters

For renters hoping to make the leap into ownership, this report offers mixed news:

On the positive side, credit score is no longer the primary barrier—a good sign for financial health and future approvals.
On the challenging side, affordability metrics remain stubbornly out of reach, especially in large metro markets.

Financial advisors recommend that renters continue focusing on savings and debt management, since down payment requirements (minimum 5–20%) still form the biggest entry hurdle.

Expert Commentary

Mortgage brokers note that while strong credit scores open the door, many renters are still turned away due to insufficient income levels. One Toronto broker explained:

“We’re seeing renters with excellent credit, sometimes in the 700+ range, but when it comes to affordability, their incomes don’t line up with today’s prices. The credit side is solved—the income side isn’t.”

This dynamic is shifting some attention toward government programs, such as first-time buyer incentives, shared-equity schemes, and potential tax breaks for saving up down payments.

Why This Matters

The improvement in renters’ credit scores suggests that Canadians are becoming more credit-savvy, a necessary foundation for entering the housing market. Yet, without structural changes to affordability, this alone may not be enough to bring a wave of renters into homeownership.

For policymakers, the message is clear: improving financial literacy is helping, but housing affordability and income growth remain the ultimate barriers.

Factor	Status for Renters
Credit Score	Now meets major bank thresholds
Income Levels	Still below what’s required for most urban markets
Down Payments	Remains the biggest hurdle (5–20% needed)

The Canadian housing market is evolving. Renters are in better credit health than ever, but affordability still leaves many locked out. As mortgage rates fluctuate and policymakers consider new interventions, the coming year will be crucial for renters aspiring to own.