Are Canadians becoming better at managing debts?

It appears that Canadians are becoming better at handling their debts, with average credit scores improving during the second quarter of the year, according to the latest analysis by Canada Mortgage and Housing Corporation (CMHC).

Credit scores for home-loan borrowers were better compared to those of new borrowers and Canadians without a mortgage.

"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," CMHC senior analyst Anne-Marie Shaker said.

During the second quarter of the year, 80% of borrowers have maintained or improved their credit scores compared to the same time last year.

At the same time, the share of borrowers who experienced a decline in credit score remained small, sitting below 5% for those without a mortgage and 3% for home-loan borrowers.

"A higher share of consumers with a less stable financial situation fall in the consumers without a mortgage category indicating this group's greater difficulty in paying off debt," Shaker said.

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