How to Improve Your Credit Scores
Many clients, especially those new to Canada or just starting out financially, are often surprised at how important credit history is when buying a home.
Lenders use credit scores — from Equifax, TransUnion, or their own models — to help decide loan approval and interest rates. The higher your score, the better your chances!
If your credit score needs a boost, there are simple steps you can take to improve it.
6 Tips to Improve Your Credit Score
1) Review your credit reports
A great first step in improving your credit score is to review your reports from both Equifax and TransUnion. Don’t worry — checking your own credit score won’t affect it.
🔍Look for errors or signs of fraud.
💳See if you have unpaid balances or past-due accounts in collections.
📉Tackle these negative items first by paying off as much debt as possible.
⚠️Remember: even if collections are paid, they will still show on your Equifax report for six years from the date they went into collections.
2) Pay on time
One of the best ways to improve your credit score is simple — pay your debts on time.
✅Payment history is a big part of your score.
🚫 Late payments can hurt your credit.
💡 Set up automatic payments or reminders to stay on track.
3) Keep your credit utilization rate low
Your credit utilization is how much credit you use compared to your limit.
📌Example: $10,000 limit + $3,000 balance = 30% utilization.
✨ Aim to keep it at or below 30%.
Ways to improve:
✅ Spend less on credit
✅ Make extra payments during the month
✅ Ask for a credit limit increase
Lower utilization = healthier credit score!
4) Don’t apply for too many new credit accounts all at once
Every time you apply for new credit, it usually creates a hard inquiry on your report, which can slightly lower your score — especially if your score is already on the lower side.
📌 Too many new accounts can also reduce the average age of your credit, another factor in your score.
✅ To improve your credit, apply for new accounts only when necessary.
5) Keep old accounts open
Even if you don’t use them, avoid closing paid-off accounts.
📌 Why? The average age of your accounts is a key factor in your credit score.
✨ Keeping older accounts open helps maintain a longer credit history, which can boost your score over time.
6) How long does it take to see changes in your credit score?
Improving your credit score takes time — it won’t happen overnight.
📌 Some negative factors are easier to fix than others:
- It’s usually easier to recover from a single late payment or a few hard inquiries than from more serious issues like collections, a consumer proposal, or bankruptcy.
✨ Stay consistent, pay your debts on time, and monitor your credit — patience pays off!