Loans & Credit

How to Improve Your Credit Score in Canada

ow to Improve Your Credit Score

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An essential guide on how to improve your credit score in Canada.

Your credit score can affect your ability to get a loan or a mortgage, the rates you pay to creditors, and even whether you can rent an apartment. That’s a lot of power in the three numbers that make up your credit score. If you lack credit or have a score that isn’t as high as you’d like, you’ll want to learn how to build credit. That’s where this article comes in. Read on to find out how to improve your credit score and ways to raise your credit score fast.

Tips on How to Improve Your Credit Score

Starting from scratch is one thing, but what if you already have a credit score that’s low? Getting your rating back on track can be a challenge, particularly if you’re carrying outstanding debt, but it’s not impossible.

Get a Low-Interest Credit Card

For the debt-averse, this might seem like a bad idea, but responsible credit card use—meaning that you pay it off on time and in full each and every month—is a great way to build up a good credit score. When searching for which card to get, you might be stuck with slim pickings if your credit score is in the dumpster or you’re carrying high-interest credit card debt. If you’re anxious about racking up interest charges, you might try a low-interest credit card. These cards offer much lower interest rates than traditional ones (that typically charge 19% or higher) — making any outstanding debt more manageable and easier to pay down. And ultimately, that smooth move will help you boost your credit score!

Get a Balance Transfer Credit Card

The first step to boosting your credit score is to pay off your debt. Carrying outstanding debt is a surefire way to suppress your credit score so prioritize debt repayment before other expenses. If you carry substantial credit card debt, your best bet is to move it to a balance transfer credit card with a low (or no!) interest rate. Not only does this help in consolidating your bills, but it will also dramatically reduce the amount of interest you’ll pay.

Get Automated Advice

Adding MyMarble to the mix can help, as it offers a financial portal that allows you to connect your bank accounts to provide you with expert insights, free credit score monitoring, and Maestro, an education platform with over 25 modules on debt, budgeting, and credit. MyMarble also offers a paid service called Score-Up — “smart” consultation software that can help you achieve your desired credit score fast. This online tool uses a computer algorithm to analyze your credit score and then tells you what action to take to increase your credit score as quickly as possible. It will even tell you which days to make purchases and which days to make payments in order to boost your credit score to the max. If you follow its advice and act responsibly, you could see an increase in your score in as little as 3 months.

Download an app

There are several apps available in Canada that will help you improve your credit score, including the one mentioned above. Some other apps work by taking deposited funds and using that money to secure a loan in your name. Each month, the app will use part of the dedicated funds to “repay” your loan, and they will report that repayment to a major credit bureau in Canada. Making regular payments will improve your credit score.

Get Into a Credit-Boosting Program

If you’re currently in consumer proposals (which is like bankruptcy), all is not lost. Marble Financial’s online MyMarble portal gives you access to a unique borrowing opportunity known as Fast-Track. Fast-Track is a structured loan with competitive interest rates.

How to Build Credit

One common misunderstanding about credit is that having no credit rating is the same as having good credit. That’s not how credit scoring works. If you’ve made the decision to avoid using credit altogether, you may be debt-free, but you’ve limited the options for your future self. If you’re wondering how to build credit, it’s easier than you might think.

Get a Secured Card

If you’ve got no credit history or a bad credit score, getting a secured card can be a solid option. With a secured card, you deposit security funds into your account. It demonstrates to credit card providers that you’re serious about establishing a solid credit history. Generally speaking, the amount you deposit typically corresponds with the credit limit you’re given.

Home Trust Secured Visa

We’re fans of the Home Trust Secured Visa, as it gives you absolute control over your spending while building your credit rating. Designed to work like a debit card, you simply load money onto the card before using it so there’s never any risk that you’ll ever spend more than what you’ve loaded onto it.

This credit card product is not available in Quebec.

Get (and Pay Back) a Personal Loan

One way to build a positive credit rating is to take out a personal loan and make regular, on-time payments. Refresh Financial offers a product called the Credit Builder Loan for loans of up to $10,000. Unlike a traditional loan, the loan amount goes into a secure account at a financial institution. As you make payments—all of which help build your credit history—you receive the money.

The Credit Builder Loan from Refresh Financial is not available to residents of Quebec.

Get Online Credit Advice

Canadian financial technology company MyMarble takes a more directed, bespoke approach to credit. When you sign up with its online portal, MyMarble, you’ll connect your banking information and receive expert insights on your spending habits and trends. These insights will help you improve your credit score, which MyMarble monitors monthly for free. If you want to boost your credit score more quickly, check out Maestro, their online education tool, or Score-Up, which offers data-driven advice on how to reach your credit target.

How to Rebuild Your Credit Score Fast

Rebuilding your credit score is a task that can take time. The credit bureaus receive information from many sources and some of them, like your utilities or credit card providers, bill monthly. That said, it can take up to 90 days for a new product (like a credit card or loan, perhaps from an online platform like Loans Canada) to show up in your account. But what if you don’t have time to wait? If you’re looking into applying for a mortgage or getting a car loan you might not want to wait for the choice and better interest rates that come with a high credit score. If you have a pressing reason to get a better credit score, there are actions you can take.

Before anything else, you need to do the following:

  • Review your credit report. You can get it for free from Equifax Canada and TransUnion Canada. Note: the request does not affect your score. If there are errors, reach out to your creditors to have your account updated.
  • Tweak your credit utilization. One thing that impacts your credit rating is the percentage of your available credit in use. Make sure you’re carrying a low debt load and resist maxing out your cards. If your credit utilization is high, consider getting a limit increase. If this isn’t available to you, another strategy is to become an authorized user on someone else’s account. For example, a trusted family member or friend may add your name to their credit card account, thus increasing the amount of credit available to you and lowering your utilization rate. Just be sure you don’t spend against this credit!
  • Avoid actions that trigger credit checks. One of the most common is new card applications. If you’re thinking about changing your cards (like transferring to a low-interest product), don’t test drive. Keep your number of applications to a minimum.
  • Make an offer. Did you know that you can offer your creditors a partial payment on your debt? If you negotiate well, you just might be able to settle an outstanding debt.

Perhaps you have done all these things and your score is still lower than you’d like. This is when you might seek assistance from a company like MyMarble.

Frequently Asked Questions About How To Improve Your Credit Score

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How Can I Raise My Credit Score in 30 Days?

If you’re looking to raise your credit score in 30 days, start by correcting any errors on your credit report. Rebalance your credit utilization so that you’re using a lower percentage of your available credit. Offer your creditors a partial payment to discharge outstanding debts. And, as always, make sure you pay your bills in full and on time. If you cannot pay in full, make the minimum payment. You can also sign up for a credit coaching and monitoring service like MyMarble, which can help you significantly boost your score in as little as 3 months.

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How Can I Get My Credit Score Up 100 Points in One Month?

An increase of 100 points on your credit score will usually take more than one month. That said, if you get rid of your consumer debt, pay your bills in full and on time, and maintain a diversified mix of consumer and secured borrowing, you will see an increase over time. If you're on the verge of bankruptcy and your score is really low, there are options. Applying for a bad credit loan like those offered through the MyMarble portal will give you an immediate credit score boost: your credit score will instantly increase from 30 to 70 points and continue to increase depending on your financial habits.

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How Fast Can You Raise Your Credit Score?

The answer to this is going to depend on many factors. Generally speaking, while it’s possible to improve your credit score by a few points over the course of a couple of weeks, more significant changes typically take months or years. If you’re starting from scratch, it’s possible to build a decent credit score in about one month. If you’re trying to raise a low score, it will take much longer because you will need time to demonstrate responsible credit use. If you use a financial service designed to improve your credit like MyMarble, your score will increase in as little as 3 months.

Last Words

Your credit score is one of the most important factors when it comes time to apply for a mortgage, make a big purchase like a car, or take out a personal loan. A better score will not only broaden your choices but also give you access to lower interest rates. Whether you’re just starting out and building your credit or repairing a score that’s gone wrong, taking these steps towards a healthier credit rating is a gift to your financial future.

Keph Senett

Keph Senett is a Canadian freelance writer with an interest in helping people make solid choices towards debt-free living. Her work has appeared in publications including Al Jazeera America, Greedy Rates, BBC News, and The Globe & Mail.

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