Your credit score plays a big role in your financial life in Canada. Whether you’re applying for a mortgage, credit card, or personal loan, lenders use your credit score to decide whether to approve you and what interest rates to offer. A higher score can save you thousands of dollars over time.

If you’re wondering how to improve credit score in Canada, this guide will give you 5 fully actionable, proven steps you can take starting right now.

1️⃣ Always Pay Your Bills On Time

Payment history is the most important factor in your credit score. In Canada, about 35% of your credit score is based on whether you make your payments on time. Missing even one payment can hurt your score and stay on your credit report for years.

Why this matters:

• Missed payments show lenders you’re a risky borrower.
• A single late payment can lower your credit score significantly.
• Consistent, on-time payments demonstrate that you’re financially responsible.

How to do it:

• Set up automatic payments for your credit cards, loans, phone bills, and utilities.
• If you’re paying manually, use reminders on your phone or calendar.
• If you can’t afford the full balance, always pay at least the minimum by the due date.
• Contact your lender immediately if you expect to miss a payment. Sometimes they may offer short-term solutions before reporting a missed payment.

Staying current with your payments is the most powerful way to improve credit score in Canada.

2️⃣ Keep Your Credit Utilization Low

Credit utilization is the percentage of your available credit you’re using. This makes up about 30% of your credit score. The lower your utilization, the better.

Why this matters:

• High balances make you look like you’re relying too heavily on credit.
• Lenders prefer to see that you use credit responsibly without maxing out your available limits.

What to aim for:

• Keep your utilization under 30% of your credit limit.
• If possible, aim for 20% or lower for the best results.

How to do it:

• Pay off your credit card balances in full whenever you can.
• Make extra payments during the month, not just at the statement date.
• Ask your credit card company for a credit limit increase — but don’t increase your spending.
• Spread your purchases across multiple cards if needed to keep individual utilization low.
• Avoid closing unused cards as this can lower your total available credit and hurt utilization.

Maintaining low balances is one of the fastest ways to improve credit score in Canada.

3️⃣ Don’t Apply for Unnecessary Credit

Every time you apply for new credit, lenders do a hard inquiry on your credit report. Hard inquiries typically lower your score by a few points and stay on your report for up to three years.

Why this matters:

• Multiple credit applications in a short period can signal financial distress.
• Too many inquiries can make lenders nervous and lower your chances of approval.

How to manage this:

• Only apply for new credit when you truly need it.
• If you’re shopping for a mortgage or car loan, try to do all applications within a 14-day window — credit bureaus typically count multiple inquiries within that period as a single inquiry.
• Use pre-qualification tools where available. These use soft inquiries and do not affect your score.
• Avoid applying for credit cards just for sign-up bonuses if you don’t need them.

Being selective about new credit applications will help protect your credit score.

4️⃣ Keep Old Credit Accounts Open

The length of your credit history makes up about 15% of your credit score. The longer you’ve had credit, the more trustworthy you appear to lenders.

Why this matters:

• Older accounts show a longer history of responsible credit use.
• Closing old credit cards can hurt both your credit utilization and average account age.

How to handle older accounts:

• Keep your oldest credit cards open, even if you rarely use them.
• Use older cards for small, recurring charges (like Netflix or a gym membership) and pay them off automatically.
• If you have a card with a high annual fee that you no longer need, contact the issuer to see if they can downgrade it to a no-fee card rather than closing the account.

Your older accounts are valuable assets when working to improve credit score in Canada.

5️⃣ Use Credit Mix and Rent Reporting to Your Advantage

Lenders like to see that you can handle different types of credit responsibly. This is known as credit mix and makes up about 10% of your credit score.

Why this matters:

• A healthy mix of credit shows lenders you can manage multiple financial responsibilities.
• Adding variety can strengthen your credit profile.

How to build a positive mix:

• If you only have credit cards, consider adding a small personal loan or a line of credit.
• Avoid taking out unnecessary debt just for the sake of variety. Only borrow what you need and can afford to repay.

Rent reporting:

In Canada, your rent payments typically don’t get reported to credit bureaus automatically. But now, you can sign up for rent reporting services like:

• Landlord Credit Bureau
• Borrowell Rent Advantage
• FrontLobby
• Chexy

These services can help you build credit by reporting your on-time rent payments to credit bureaus. This is especially helpful for renters who don’t have much other credit history.

Adding rent reporting is a simple way to improve credit score in Canada without taking on new debt.

Bonus: Check Your Credit Report Regularly

Mistakes on your credit report can drag down your score without you even knowing.

How to check:

• In Canada, you can request free credit reports from:
  • Equifax Canada (equifax.ca)
  • TransUnion Canada (transunion.ca)
• Review your report at least once per year.
• Look for errors like:
  • Incorrect personal information
  • Accounts you don’t recognize
  • Late payments reported in error
  • Closed accounts showing as open

If you find an error, file a dispute right away with the credit bureau to have it corrected.

Summary Table: Quick Reference

Final Thoughts

Improving credit score in Canada isn’t complicated—but it takes consistency. Focus on paying your bills on time, keeping your credit utilization low, maintaining old accounts, being smart about new applications, and using rent reporting if you’re a renter.

If you stay disciplined and patient, you’ll see your credit score improve month after month, opening doors to better interest rates and financial opportunities

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