How To Improve Your Credit Score In Canada

Let’s face it, some of us need to learn the hard way that spending what we don’t have is a bad idea. Ideally, we realize this before destroying our credit rating. Unfortunately, many of us only learn the impact of our bad money management when we fail to get a loan. That’s why it’s important to understand how to improve your credit score in Canada.

Thankfully, there are steps to improve your score that you can take right now to positively influence your credit rating. So, if you hope to get a car loan or a mortgage sooner rather than later, and your credit score is in the dumps, all is not lost.

What Is A Credit Score And How Is It Calculated?

Your credit score is a number representing your credit allowance and usage over a lifetime, among other factors. And lenders use this number as a guide as to your trustworthiness as a borrower.

To determine your credit score, creditors use a number of factors as indicators of your ability to repay your debts. Your score is comprised of the following:

  • Payment history – 35%
  • Credit owed – 30%
  • Length of credit history – 15%
  • Number of credit applications – 10%
  • Types of credit used – 10%

Lenders report to Equifax and/or TransUnion. But it’s not just lenders that impact your credit score. In addition, your income, assets and employment history impact your score.

Your credit score & report. Always free, forever

It takes 3 minutes to join 20+ million people who trust ClearScore to help them improve their financial future

Who Determines Your Credit Score?

Consult the credit bureaus to find out your credit score. It’s helpful to have a basic understanding of what they do and how they compile your score. A credit bureau gathers and analyzes information from financial institutions and courthouses to determine your reliability as a creditor. Then, this information is compiled to create your credit report and determine your credit score.


TransUnion Canada is based in Burlington, Ontario. Like Equifax, it uses proprietary technology to draw information from the credit bureau to provide potential lenders with a credit score. Also like Equifax, TransUnion was founded in the U.S. Its headquarters are in Chicago, Illinois.


Equifax Canada is based in Toronto, Ontario, and is one of the two major agencies that provide information and reports from credit bureaus. Originally founded in the late 1800s in Atlanta Georgia, Equifax set up a presence in Canada by early in the 21st century. The agency uses technology and access to your credit bureau information to create a credit score that creditors use to determine a consumer’s trustworthiness as a borrower.

Related Reading: How is your credit score calculated in Canada?

How Fast Can You Raise Your Credit Score?

It depends. If you file for bankruptcy or are sent to collections, it’s going to take you longer to get out of the hole. However, if you’re diligent, you can see your credit score improve significantly in as little as 30 days. And a month is all it takes to see your score jump by as much as 200 points. But it won’t happen unless you make a plan and stick to it.

Your credit score & report. Always free, forever

It takes 3 minutes to join 20+ million people who trust ClearScore to help them improve their financial future

How Can I Increase My Credit Score Overnight?

If you want to buy a car this week and your credit score is in the toilet, there’s not much you can do today to qualify quickly. That being said, if you’re close to the threshold and just need it to go up by a few points, you might be able to squeak through.

The fastest way to improve your credit score is to change your debt ratio. And there are two ways you can do this. One is easy but risky. However, the other is harder but better from a money-management perspective.

Pay down your debts – This is the ideal scenario. To clarify, the more unused credit you have, the better your credit score. So, if you can pay down your debts and increase your credit-to-debt ratio, you will see a positive and immediate impact on your credit score.

Apply for more credit – Here’s the thing about this method: it’s a solid plan if you don’t intend to use the credit. To clarify, the more access to credit you have that you DON’T use, the better the bureau considers your money management skills. So, if you need to increase your credit score by the end of the week, apply for a loan or a credit card today and then don’t touch it!

How Can I Improve My Credit Score In 30 Days?

It sounds like a bit of a pipe dream, but it’s not that hard to improve your credit rating significantly, and quickly. The vital first step to debt management is to review your credit report to see the impact of your spending.

Knowledge Is Power

You can’t easily fix what’s broken if you are in the dark about your score. Credit agencies like Equifax and TransUnion provide access to your credit report. And it’s worth spending the few dollars it costs to review your score. In addition, you can see all of the credit you have or have had access to, and how it was managed.

Once you have your report, highlight the loans hitting your score the hardest. Then, take stock of how many times you’ve applied for and used credit. That’s because you may think you know the truth about your credit. But when it’s all listed and spelled out, it’s harder to ignore the reality of your spending and debt usage.

Knowledge is power when it comes to improving your credit score in Canada.

Fix What’s Broken

What’s broken might not be your fault. Therefore, it’s important to go through your credit report to pinpoint any errors negatively impacting your score. And it’s surprising how often a simple clerical error makes its way to the bureau and hurts you.

If you notice discrepancies in your credit report, contact TransUnion or Equifax to dispute a line item or fix an error.

Your credit score & report. Always free, forever

It takes 3 minutes to join 20+ million people who trust ClearScore to help them improve their financial future

One important thing to note is how many times credits make inquiries. To clarify, every time a potential creditor asks to look at your score for their own purposes, it affects your credit. Therefore, if you didn’t give permission for a check, let the bureau know.

That being said, there is a difference between hard and soft credit checks. And they impact your credit score differently.

Hard credit check

A hard credit check occurs when you apply for a loan or credit card. Any time a potential lender asks for access to your credit history, that is a hard credit check and shows up on your credit report.

Soft credit check

If you apply for a job that requires a credit check, or you need approval for an apartment, these types of enquires are soft credit checks. These agencies are not looking to lend you money. Instead, they only want to know if you’re reliable. And as such, these types of enquiries don’t impact your credit score.

Pay It Off!

Here’s the fun thing about credit – it’s there to use. But it’s not yours to keep. You need to pay it back. Any outstanding balances hit your credit score. And the more available credit you have and don’t use, the better your score. Therefore, having as much room on your credit allowance as possible can help your score improve.


If you have a close friend or family member who doesn’t suffer from bad credit, ask if they will add you as an authorized user on their accounts. It’s kind of like getting a co-sign on a loan. The credit access is yours to manage, which positively impacts your credit score. But the responsibility, should you default, isn’t on your shoulders.

What Is A Bad Credit Score?

There is a credit score range, and your number falls somewhere within it. In Canada, the numbers break down like this:

  • 800 – 900: Excellent
  • 720 – 799: Very Good
  • 650 – 719: Good
  • 600 – 649: Fair
  • 300 – 599: Poor

Related Reading: Secured Credit Card Canada: A Complete Guide

But what do those numbers really mean?

The lowest score you can have is 300 (so you’re not starting at zero!). The best possible score is 900. Depending on who you listen to, different scores are considered ‘bad.’ Some suggest anything below a score of 650 is considered poor. Others consider 574 as the low-end benchmark. With a score in that range, you’re going to find creditors think twice about lending you money. To clarify, a score below that threshold suggests you are not reliable at managing credit.

What Is A Good Credit Score?

Many people think a score of 800 is the golden ticket to freedom and anything below that isn’t good. Truthfully, 800 is hard to achieve and most Canadians fall comfortably into the 600 to 750 range. Therefore, any score within that ballpark is considered ‘good’ in Canada.

How Can I Increase My Credit Score To 800?

It is a bit of a misnomer that having a credit score over 800 is a worthy goal. At some point you’re just padding a solid score you should be proud of having and able to maintain. That being said, for some people, having a score over 800 is a goal to strive for. Ultimately, improving your credit score comes down to extreme discipline and money management.

Live Long And Prosper

Who doesn’t love a pop-culture reference? Seriously though, having longstanding credit helps boost your credit score. Therefore, to see your score tip the 800-point mark, you need to have a long period of maintaining your debt accounts and managing them successfully.

Don’t Pass Go, Don’t Collect 200 Dollars

You need to pay your bills. But if you have a habit of missing payments or being delinquent, it’s going to kill your credit score. Past delinquencies make it difficult to come near that 800-point benchmark.

Stop Asking For Money!

The more you ask for credit, the more inquiries to your credit bureau. And therefore, the more hits to your score. Use the credit you already have wisely if hitting that threshold is important to you. While one way to boost your score is to seek more credit, if you want to hit that magic 800 number, it’s a better strategy to pay down the credit you already have.

Just Because You Have It, Doesn’t Mean You Should Use It

At the end of the day, credit is there to borrow, not spend as if it’s yours. The more you borrow without repaying in full, the more burden there is on your credit. There isn’t so much wrong with having $100,000 in available credit. There is something wrong with having it and having it all maxed.

How to Improve Your Credit Score

There are many ways to improve your credit score. Therefore, choose the option that works best for you. And make sure you first check your credit score. This helps you understand where you are today, and where you need to go. And the good news is, there are steps you can take today to positively influence your credit score for tomorrow.

Read More: What is the average credit score in Canada?

You’re in the right place for financial advice.

Getting started is easy, fast and free. Match to your perfect advisor now.

Get 12 Smart Questions Everyone Should Ask Their Financial Advisor

Download these questions plus more with the Advisorsavvy community newsletter – subscribe now and enjoy a wealth of knowledge.

Subscribe now and get 12 Smart Questions Everyone Should Ask Their Financial Advisor