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How to Increase Your Credit Score in Canada

Loan Express does not require credit checks, decline a loan based off a credit check, nor do credit checks affect the minimum approved amount of the loan. The following article is purely for educational purposes.


According to TransUnion, the average Canadian credit score is around 650, which means that most Canadians have average to good credit.

Your credit score directly affects your capability to receive approval for financing, including credit cards, some loans, and mortgages. Higher scores prove to lenders that you are likely to pay back your debts in the agreed-upon terms.

A good or excellent credit score also allows you to qualify for premium credit cards with rewards and perks, giving you access to more desirable terms on loans, such as lower interest rates and fees.

According to Equifax, only 14% of Canadians check their credit score once a year, and 56% had never checked it at all! Canadians need to check their credit once a year to know their credit score and ensure that they have not been the victim of identity theft.

Tips for How to Improve Your Credit Score

While most Canadians have good credit, we know that life can take an unexpected turn, and your credit score may take a hit. Here are eight concrete steps you can take to improve your credit score as quickly as possible.

How to Increase Your Credit Score - An Infographic

1) Make Your Payments on Time

While easier said than done, budgeting to ensure you can make payments on time can make a massive difference as it makes up around 35% of your credit score. Start with paying off any past due accounts, starting with the oldest ones first. If there are any overdue utility bills, contact your provider to arrange a payment plan. Unpaid utility bills can lower your credit score if your current provider sends unpaid invoices to a collection agency.

Make Your Payments on Time - An Infographic

Quick Tips:

  • Set bill payment alerts on your phone to keep them top of mind. 
  • Automate bill payments to be paid through your bank account or credit card to ensure that your bills will be taken care of without the need to make the payments manually.

2) Lower Your Credit Utilization

Another major factor affecting your credit score is credit utilization, which makes up around 30% of your credit score. Your credit utilization shows how much credit you’ve used compared to the total amount available to you. It’s recommended to keep your credit utilization below 30%.

If you’re in a situation where you need to improve your credit score, such as obtaining a loan to purchase a home, you need to know how much your total available credit is being used and keep it at the lowest amount possible. Here are some additional tips to help with credit card debt:

3) Always Pay More Than the Minimal Amount for Credit Card Debt

Pay more than the minimum payment on your credit card. This will decrease your credit utilization rate, which in turn can help improve your credit score. Paying more than your minimum payment also enables you to pay your credit card off quickly, as you save money that would otherwise go towards interest.

4) Increase Your Credit Card Limit

Accepting to increase your credit limit may sound counterintuitive, but it can help your credit score in the long run. Think about it; if you keep your spending the same but increase your limit, your credit utilization will decrease. Use the extra credit responsibly, and try not to increase your spending with the newly approved limit.

5) Avoid Hard Credit Inquiries

When seeking additional credit, you need to know the difference between hard credit inquiries and soft credit inquiries.

Hard credit inquiries, also known as a hard pull or hard check, happens when lenders check credit reports before approval. This provides lenders full access to your entire credit history and can temporarily harm your score. Hard credit inquiries can stay on your credit reports for up to three years.

Soft credit inquiries, also known as a soft pull or soft check, are when you check your own credit score. This does not affect your overall credit score.

It’s important to understand that not all credit inquiries are created equal, and they affect your score in various ways. Understand what you agree to before going through with an additional loan.

6) Diversify Your Credit Mix

A credit mix refers to the types of credit accounts you currently have open. These can include credit cards, loans and mortgages. This means that you can build your credit score by taking out and paying back personal loans, or car loans can help increase and diversify your credit mix. This can include revolving credit, installment credit, open status credit and mortgage loans.

Your credit diversity makes up around 10% of your overall score, so it is not as important as other steps we’ve listed, and you shouldn’t open them if you do not expect to use them. However, lenders and creditors like to see a diverse credit mix, proving that you can manage different credit accounts responsibly.

7) Keep Your Oldest Credit Card

If you have a credit card account that you haven’t used in years, a better option may be to keep the account open, using it occasionally so your lender does not close it for lack of use. This is a critical factor that can affect your credit score – the older, the better! By keeping the account open, you build up your credit history and total available credit, showing that you have a record of consistently paying down your debts without missing deadlines.

What Is a Good Credit Score in Canada?

While your number may typically range between 300 and 900, a good credit score in Canada is about 713. Depending on where you live, the standard credit score of your city may be lower or higher. Lenders commonly recognize those with credit scores of 660 as lower-risk borrowers.

How Long Does It Take to Improve a Credit Score in Canada?

Generally, it takes around 30 days to see signs of improvement in your credit score. This is because your payment behaviour is reported to credit bureaus every 30 days. The fastest way to improve your credit score is by settling your bills on time and utilizing less than your credit limit. When done habitually, it may raise your score by as many as 100 points.

Note that if you currently hold negative information on your credit report or try to dispute your credit report, it can take three to six months to adjust your bad credit score.

Want to Apply for Loan Without A Credit Check? Visit Loan Express Today!

When it comes to applying for a loan with Loan Express, good credit or bad credit makes no difference. We will never reject an application based on credit history or a credit score! Receive the cash you need with peace of mind today, with Loan Express.