Canada's Credit Paradox: Knowledge is High, but Scores Remain Stagnant

TORONTO, ON – July 14, 2026 – A striking contradiction is unfolding in the financial lives of Canadians. A new national survey reveals that while a commanding 84 per cent of the population understands the factors that shape their credit score, nearly half (47%) feel stuck, facing significant barriers to making any meaningful improvement. This gap between awareness and action, detailed in a study released by alternative financial services provider Money Mart, paints a picture of a nation grappling with financial paralysis, particularly among its younger generations.

The findings suggest the challenge is no longer about education, but about execution. With fewer than half of Canadians (45%) actively working to build their credit, and a pervasive feeling among younger adults that the system is fundamentally rigged against them, a critical question emerges: If knowledge isn't the problem, what is? The answer points to a complex web of perceived barriers, fragmented advice, and a growing market for non-traditional financial solutions that promise a pathway forward, but not without their own set of red flags.

The Great Disconnect: From Awareness to Inaction

The survey, conducted by the Angus Reid Forum, dissects the inertia gripping Canadian consumers. It’s not that they don't want to improve; it's that they feel unable. Among those struggling, 22 per cent admit they know the necessary steps but haven't followed through, 18 per cent are unsure where to even begin, and a disheartened 11 per cent have tried and given up. This isn't simple procrastination; it's a symptom of a deeper issue.

The most cited barriers are telling. While some (39%) confess to simply not prioritizing it, a significant 34 per cent feel they are unable to take on more credit or debt—a classic catch-22 where building credit requires using credit, a step many feel is too risky in the current economic climate. This financial gridlock is having a tangible impact on the Canadian dream. The data shows credit worries are forcing people to postpone major life milestones. A staggering 36 per cent of Gen Z and 28 per cent of Millennials have delayed buying a home due to their credit standing. The ripple effect extends to financing a vehicle (31% of Gen Z) and even renting an apartment (26% of Gen Z), freezing economic mobility for a generation already facing immense financial pressure.

Adding to the confusion is the source of financial guidance. Canadians are turning to a patchwork of sources, with friends and family (37%) being the most common counsel, ranking slightly higher than professional financial advisors (34%) and online searches (34%). This ad-hoc approach suggests a lack of trust or access to clear, consolidated professional advice, leaving many to navigate a high-stakes system on their own.

A System “Stacked Against Them”?

Perhaps the most alarming finding is the deep-seated cynicism among younger Canadians. An overwhelming 71 per cent of Gen Z and 70 per cent of Millennials believe the credit system is designed for people who are already financially stable. This sentiment isn't just youthful angst; it’s a reflection of a system where traditional lenders often rely on established credit histories, creating a formidable barrier to entry for those just starting out or those who have previously stumbled.

These feelings are backed by numbers. The survey shows that the barriers to credit improvement are most acute for younger and lower-income households. While 47 per cent of all Canadians report a barrier, that figure skyrockets to 68 per cent for Gen Z and 66 per cent for households earning under $50,000 annually. For these groups, the path to a prime credit score—the key that unlocks favorable interest rates on mortgages, car loans, and business ventures—seems all but closed.

This perception of an inequitable system is precisely the gap that alternative financial service providers are built to fill. They see a market of willing, if struggling, consumers who are being overlooked by mainstream banks and credit unions.

An Industry’s Answer

Into this environment steps Money Mart, the company that commissioned the survey. The firm, a long-standing player in the alternative lending space, positions its findings as a call to action—and its products as the solution. The company's CEO, Peter Kalen, stated, “Our findings suggest the issue isn't simply awareness, it's having access to practical options that help people build a positive credit history over time.”

The core of their pitch lies in credit-building pathways. The company highlights its transition of customers from short-term payday loans to installment loans—products that report repayment behavior to major credit bureaus. By making consistent, on-time payments, customers can theoretically demonstrate their creditworthiness and see their scores rise.

Money Mart offers its own internal data as proof of concept. An 18-month analysis of customers in Alberta and Manitoba with initial credit scores below 560 found that 91 per cent of those who made on-time payments saw their scores improve, with an average increase of 68 points. For someone locked out of the traditional system, such an improvement could be life-changing, potentially opening the door to better financial products down the road.

Weighing Access Against Risk

For investors and consumers, the rise of alternative credit-building solutions presents a complex calculus of opportunity and risk. On one hand, companies like Money Mart, along with a host of fintech startups like Borrowell and KOHO, are providing a vital service. They offer access to credit for the underbanked and those deemed too risky by traditional metrics. Their products, from secured credit cards to small installment loans, offer a tangible ladder for those seeking to climb out of a low-score predicament.

However, this access often comes at a premium. The alternative lending industry has long been scrutinized for high interest rates and fees. While new federal regulations as of 2025 cap the criminal interest rate at 35% APR and payday loan costs at $14 per $100 borrowed, these rates are still substantially higher than those offered by traditional lenders. The critical question for a consumer is whether the benefit of potential credit score improvement outweighs the high cost of borrowing.

Consumer experiences paint a bifurcated picture that should give anyone pause. Money Mart boasts a 4.8-star rating on Trustpilot from thousands of reviews praising its speed and convenience. Yet, the company holds an 'F' rating from the Better Business Bureau, where complaints cite unresolved fee disputes and credit reporting errors. This stark contrast highlights the precarious nature of the market: for some, it’s a lifeline; for others, it can become another financial trap.

Ultimately, the Money Mart survey doesn't just reveal a problem in consumer finance; it illuminates a significant market shift. As traditional institutions struggle to cater to a new generation of financially anxious consumers, alternative lenders are aggressively stepping in. They are successfully identifying a pain point—the gap between knowing and doing—and marketing a solution. The long-term success of this model, both for the companies and their customers, will depend on a delicate balance between providing genuine credit-building opportunities and navigating the regulatory and ethical complexities of serving society's most financially vulnerable.