How to Improve Your Credit Score in Canada

1. Check both Canadian credit reports

Canada has two main credit bureaus: Equifax and TransUnion. Their files may not be identical because creditors do not always report to both. Review your personal information, account status, balances, payment history, collections, and inquiries.

Dispute information that is incomplete or inaccurate with the bureau and the creditor that supplied it. Do not pay a company to “erase” accurate negative information; legitimate information generally remains for the period allowed by provincial law and bureau policy.

2. Make every payment on time

Payment history is one of the most important parts of a credit profile. Set automatic minimum payments as a safety net, then pay more manually when possible. Contact a creditor before a due date when you expect difficulty; an agreed arrangement may be better than an unplanned missed payment.

3. Reduce credit-card and line-of-credit balances

Credit utilization compares revolving balances with available limits. High utilization can signal financial pressure even when payments are current. Focus extra payments on revolving accounts, avoid repeatedly reaching the limit, and consider making payments before the statement date so a lower balance may be reported.

4. Limit unnecessary credit applications

Hard inquiries may affect a score and remain visible for a period of time. Apply selectively, confirm whether a provider will use a hard or soft inquiry, and avoid sending many applications to unrelated lenders in a short period.

5. Keep suitable older accounts active

A longer positive history can help. Closing an older revolving account may reduce available credit and increase utilization. However, keeping an account is not worthwhile when it has a high fee, encourages overspending, or creates fraud risk. Base the decision on the full account value, not the score alone.

6. Deal with overdue accounts and collections

Contact the creditor or collection agency, verify the debt, request the balance and terms in writing, and keep records of payments. Paying a collection does not automatically remove the historical entry, but resolving it may still be important for future underwriting and to stop further collection activity.

When debt payments are no longer manageable, speak with a reputable non-profit credit counsellor or a Licensed Insolvency Trustee. A debt-management plan, consumer proposal, or bankruptcy has different costs and credit consequences, so obtain qualified advice before proceeding.

7. Use new credit carefully

A secured credit card or small credit-building product may help establish payment history when used lightly and paid on time. A personal loan can also add an installment account, but it should not be taken solely to “fix” a score. Confirm that payments are reported, compare the total cost, and borrow only an amount that fits your budget.

A 90-day credit improvement checklist

Frequently asked questions