15 Tips To Increase Your Credit Score in Canada

Your credit score plays an essential role in your overall financial health and access to credit in Canada. Whether for mortgage financing, car loans, credit cards, or anything else, having good or excellent credit opens doors to better interest rates and more favorable terms while having poor one’s limits options and increased borrowing costs significantly. Thus, there is a need to take proactive steps to raise the score. Here, we discuss valuable tips and strategies that assist in boosting your credit score in Canada.

First Step in Improving Your Credit Report

To move towards enhancing your credit score, start by understanding where it stands right now. Order copies of your report from both major Canadian credit bureaus – Equifax and TransUnion. Review it thoroughly to verify its accuracy. Look out for any discrepancies, such as accounts that don’t belong to you or inaccurate payment statuses that might require dispute, and work toward making sure it reflects who you are financially.

Make Payments on Time

One of the primary factors affecting your credit score is payment history. Always aim to pay all bills on time – credit cards, loans, and utility bills alike. Late payments hurt both credit scores and reports for up to seven years after due dates have passed. Setting reminders or automatic payments can help ensure payment on due dates without incurring penalties or interest fees.

Reduce Credit Utilization

The amount you currently use of the total available credit limit is termed credit utilization. Make the credit expenditure less than 30%, as lenders view lower utilization as less risky borrowers. High utilization can signal financial distress and negatively affect your score. To lower this number, consider paying down outstanding balances or increasing limits.

Diversify Your Credit Mix

Lenders prefer an extensive credit history that illustrates responsible account management across various accounts such as loans, credit cards, and retail. But don’t open new credit accounts to diversify your mix. Do so only if necessary and handle it responsibly.

Avoid Closing Old Accounts

Your length of credit history plays a big part in determining your score. Closing old and inactive credit accounts could negatively affect both you and the length of your average age of credit history. So, if a particular account has proven positive over time, consider keeping it open to maintain a healthy score.

Limit Credit Applications

Every time you apply for new credit, a hard inquiry will appear on your credit report and could lower your score significantly. Only use when necessary and avoid making multiple applications within an immediate timeframe.

Pay Off Debt Strategically

Employ the debt avalanche or snowball method for efficient repayment when dealing with multiple debts. While one way targets higher-interest deficits first, the other encourages paying off smaller balances early for psychological motivation. Regardless of the approach, reducing the overall debt load positively affects the credit score.

Secured Credit Cards

If your credit is limited or poor, secured credit cards can be an invaluable way of rebuilding it. Placing a security deposit as collateral on these cards, using them responsibly, and making regular on-time payments helps build or rebuild the score over time.

Set Up Payment Reminders

Missed payments can have severe repercussions on your credit score. Therefore, setting payment reminders via your bank’s online portal or budgeting apps will help track payment due dates and ensure they don’t slip by you. Creating a budget will allow you to allocate enough funds to never miss one!

Doing Business with an Authorized User

Consider asking someone with excellent credit histories – such as family or close friends with good records – to add you as an authorized user on their credit card account to boost your score since their positive actions will reflect in your report. Ideally, ensure the primary cardholder maintains an optimal utilization ratio and pays their bills on time to reap the maximum benefit in improving your own.

Rent Reporting Services

Canadians tend to pay rent on time, yet often go unreported to credit bureaus. Consider employing rent reporting services that report your payments directly to them to create a positive payment history and enhance your score. It is helpful if your credit history is limited.

Check Your Credit Regularly

Maintain a watch over your credit score and report by monitoring them frequently. Doing this allows you to spot errors, detect fraudulent activity and take immediate steps toward rectifying discrepancies in your report. Many credit monitoring services in Canada offer regular updates for free related to your account.

Negotiate or Settle Delinquent Accounts

If unpaid debts appear on your credit report, consider negotiating a settlement deal with creditors or collection agencies to reduce the impact on your score by paying less than what was owed. This may have a less adverse effect than leaving it outstanding and unpayable.

Apply for a Credit Builder Loan

Credit builder loans are designed to assist individuals in building or rebuilding their credit scores. Lenders hold your loan amount in an account like savings or certificates of deposit until you make regular payments. At loan completion, you receive your funds along with an improved score!

Avoid Co-signing Agreements

It is wise to consider whether it makes sense for you to co-sign a loan or credit agreement on behalf of someone else, as co-signing makes you equally responsible for their debt. If they default, this could severely harm their credit scores. Only co-sign if confident in their ability to responsibly manage debt repayment.

Avoid Maxing Out Credit Cards

Maxing out your credit cards can signal financial stress and have a devastating impact on your credit score. Aim to maintain low balances each month and pay the monthly generated statement amount immediately, as this demonstrates responsible credit management, ultimately increasing your score positively.


Improving your credit score in Canada takes dedication, discipline, and knowledge of financial habits. By following these strategies and tips for improving credit, you can take control of your score and pave the way toward healthier finances in the future. Building credit histories takes time. However, patience is essential as the procedure requires consistent effort over time. With responsible management, you can increase your score while increasing access to loan opportunities and better financial solutions.

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