94% of Canadians are confident in their credit knowledge, but nearly half get this wrong

Most Canadians say they understand how credit scores work. In a Ratehub.ca survey of 579 Canadians conducted in July 2026, 94% said they were confident in their understanding of how credit scores are built. But their answers to the rest of the survey pointed to some persistent gaps.

Nearly half of respondents (48.4%) either believed that becoming an authorized user on someone else's credit card helps build their own credit or weren't sure. In most cases in Canada, it doesn't. More than one in four (27.6%) also didn't correctly identify when Canadians can generally begin building their own credit history.

Credit scores play an important role in Canadians' financial lives. Whether you're applying for your first credit card, financing a car or trying to qualify for a mortgage, having a strong credit history can make it easier to access the financial products you need. Below, we break down what Canadians know about building credit, where misconceptions remain, and what young Canadians should know before using credit for the first time.

How confident are Canadians in their credit knowledge?

The survey findings show that the vast majority of respondents are confident in their understanding of how credit scores are built. 43.2% said they are very confident, while 51.1% said they are somewhat confident, for a total of 94.3%. Just 5.7% said they are not very confident.

While most respondents feel they understand credit scores, the survey results show there are still some misconceptions about how and when Canadians can begin building their own credit history.

Do Canadians know how to build credit?

For the most part, respondents understand the basic ways to build credit. 88.3% said having a credit card in their own name can help establish credit, 81.5% selected making on-time payments on a student credit card and 78.2% selected making on-time loan payments. Only around 1% selected "none of the above" or said they weren't sure.

The results show that most respondents understand that using credit responsibly and making payments on time can help build a positive credit history.

This question allowed respondents to select multiple ways someone can build credit.

Do authorized users build credit in Canada?

Despite respondents' overall confidence in their credit knowledge, becoming an authorized user on someone else's credit card is one area where there is significant confusion. Just over half (51.6%) correctly identified that, in most cases, becoming an authorized user does not help build their own credit history. Nearly one-quarter (24.7%) believed it does, while another 23.7% weren't sure. Combined, 48.4% of respondents either misunderstood or were unsure about how authorized-user status affects their credit.

An authorized user, also known as an additional cardholder or supplementary cardholder, is someone who is added to another person's credit card account and receives a card they can use to make purchases. The primary cardholder remains responsible for the account and its payments. In most cases in Canada, being an authorized user does not build the additional cardholder’s own credit history. Whether the account appears on an authorized user's credit report depends on whether the card issuer reports authorized-user activity to Equifax and TransUnion, and most Canadian issuers do not. Even where an issuer does report, the authorized user isn't responsible for making payments, so the account's payment history, one of the most influential factors in a credit score, isn't attributed to them.

Parents may choose to add their child as an authorized user to help teach them how credit cards and responsible spending work. However, this won't build the child's own credit history. Once they're old enough to apply for credit themselves, they'll need a credit product in their own name to begin establishing their credit history.

When can Canadians start building credit?

Nearly three-quarters (72.4%) of respondents correctly identified age 18 or 19, depending on the province or territory, as when Canadians can generally begin building their own credit history. However, 23.8% believed Canadians can start before reaching the age of majority, while 3.8% believed they need to wait until after age 19.

The age of majority in Canada is either 18 or 19, depending on the province or territory. Once someone reaches the age of majority, they can generally apply for a credit product in their own name and begin establishing their credit history.

For young Canadians, this could mean applying for a student or entry-level credit card. A secured credit card may also be an option for someone who doesn't yet have an established credit history.

What is the biggest credit challenge for first-time borrowers?

When asked about the biggest challenge facing someone using credit for the first time, 35.9% of respondents said avoiding taking on too much debt. Understanding how credit scores work was a close second at 33.2%. Another 18.8% said avoiding missed payments is the biggest challenge, while 10% said choosing the right credit products.

The results suggest that Canadians see both understanding credit and managing debt as significant challenges for new borrowers. For parents and caregivers, discussing how credit works before a child applies for their first credit product can help prepare them to manage borrowing responsibly.

What is a credit score and why does it matter?

A credit score is a three-digit number that represents your creditworthiness based on information in your credit report. Lenders use your credit history and score to help determine how likely you are to repay borrowed money, and having a good credit score can be important when applying for financial products such as a credit card, car loan or mortgage. Your score can also affect the products and interest rates you're offered.

Several factors can affect your credit score, including your payment history, how much of your available credit you're using, the length of your credit history and applications for new credit. Starting to build credit when you're eligible and developing responsible borrowing habits can help establish a positive credit history over time.

What is a good credit score in Canada?

Credit scores in Canada generally range from 300 to 900, with a higher score indicating a stronger credit history. While lenders and credit bureaus may use different scoring models, a score between 660 and 724 is generally considered good, 725 to 759 is considered very good, and 760 or higher is considered excellent.

Having a higher credit score doesn't guarantee you'll be approved for a credit product, as lenders consider other factors when reviewing an application. However, a strong credit history can make it easier to qualify for loans and credit cards and may help you access more favourable rates and terms.

If you're new to credit, you won't start with a perfect score. Building a strong credit history takes time, which makes developing good habits, such as making payments on time and keeping balances manageable, especially important when you first begin using credit.

How to build credit in Canada

The survey suggests most Canadians already recognize two of the most important credit-building behaviours: having credit in your own name and consistently making payments on time. For someone just starting out, a few habits can help establish and maintain a healthy credit history:

• Pay your bills on time: Your payment history is an important factor in determining your credit score. Missing payments can negatively affect your credit.
• Keep your credit utilization low: Using a large percentage of your available credit can affect your score. Keeping balances manageable can help demonstrate responsible credit use.
• Avoid applying for too much credit at once: Applying for several credit products within a short period can result in multiple hard credit checks on your report.
• Keep older accounts in good standing: The length of your credit history can affect your score, so keeping older accounts open and in good standing may help.
• Check your credit report: Reviewing your credit report regularly can help you understand your credit history and identify any potential errors.
• Only borrow what you can afford to repay: Keeping debt manageable can make it easier to make your payments on time and avoid carrying balances you can't afford.

Starting with one manageable credit product and developing consistent payment habits can be more valuable than opening several accounts simply to try to build credit faster.

How can parents help their children prepare to build credit?

While minors generally can't open a credit card in their own name and begin building an independent credit history, parents can help them develop the skills they'll need before they become eligible.

If your credit card issuer allows it, you could add your child as an authorized user or additional cardholder. As our survey findings show, this generally won't build their own credit history in Canada, but it can provide a practical way to teach them how credit works. Consider setting a monthly spending limit, reviewing the statement together and having them keep track of their purchases. This can help reinforce that a credit limit isn't money available to spend, but money that needs to be repaid.

Parents can also show their children what happens when a balance isn't paid in full. Reviewing a credit card statement together can help explain the payment due date, minimum payment, interest rate and how interest can make purchases more expensive when a balance is carried.

Once your child reaches the age of majority in their province or territory, they can generally apply for a credit product in their own name. A student, entry-level or secured credit card may be a place to start. Encourage them to keep purchases manageable, pay their balance in full and on time whenever possible and avoid applying for several credit products at once. These habits can help them begin establishing their own credit history responsibly.

The bottom line

The survey found that most respondents are confident in their understanding of credit scores and generally know the basics of building credit, including having credit in their own name and making payments on time. However, there are still some misconceptions about how and when Canadians can begin establishing their own credit history.

Nearly half of respondents either incorrectly believe becoming an authorized user on someone else's credit card can help build their own credit or aren't sure, while more than one-quarter didn't correctly identify when Canadians can generally begin building credit. Respondents also pointed to avoiding too much debt and understanding how credit scores work as the biggest challenges for first-time borrowers.

For parents and caregivers, talking about credit before a young person applies for their first credit product can help prepare them to borrow responsibly. Understanding how credit works, when they can start building it and the importance of making payments on time can help young Canadians develop good credit habits from the start.