Best Ways To Improve Your Credit Score

A credit score is a statistical number used to determine the credit worthiness of a person, based on credit history. Lenders or creditors use credit scores to evaluate the probability that a person will repay his or her debts. The credit score model was created by the Fair Isaac Corporation, also known as FICO, and it is used by financial institutions. A person's credit score ranges from 300 to 900. The higher the score, the more financially trustworthy a person is considered to be.

People can possess higher credit scores by maintaining a history of timely repayments and keeping their debt low. A credit score plays a crucial role in a lender’s decision to offer credit. People with credit score below 650 are at higher risk of loan rejection and if approved, they will have to pay higher interest rates than that of borrowers with good credit score.

Canada operates with a credit score ranges from 300 to 900. The lower your score, the less likely you are to be approved for a loan or credit card. If you do manage to get approved for a loan with a low credit score, the interest rate you receive will likely be high.

On the other hand, the high your credit score, the greater are the chances to be approved for a credit card or loan at a lower interest rate. Good credit can also help you rent an apartment, get a better job, get approved for insurance coverage at a lower premium and get a better plan for your cable, phone or utilities.

  • Excellent (741-900)
  • Good (690-740)
  • Fair/average (660-689)
  • Below average (575-659)
  • Poor (300-574)

Canadians are entitled to get free credit report once per year from major credit agencies namely Equifax and TransUnion. If you can’t wait for a year to get your credit report, free report from the credit bureau, Borrowell, a Canadian financial technology company and credit monitoring service, can give you free access to your credit score on a monthly basis. There are many factors that can influence a credit score positively or negatively such as payment history (35%), amounts owed (30%), length of credit history (15%), new credit (10%) and types of credit (10%).

Having a good credit score is a valuable tool for anyone who is trying to navigate his/her financial life. Making a decent income and saving money are the healthy practices of having a good credit score, but if you don’t have one you can still work on improving your score by following some easy steps:

1. Check your credit report regularly for errors

It is necessary to carefully review your credit report from the credit reporting agencies for any incorrect information or errors.

2. Pay your bills on time

Lenders review your credit report to check your credit score when they are interested to know you reliably you can pay your bills. Your past payment performance is considered a good predictor of future performance. Your credit score is essentially a reflection of your ability to pay back debt effectively. You should avoid things like late payments, defaults, missed payments, foreclosures and third party collections. So, make sure to pay your bills on time. 6 months of regular payments is required to see a noticeable difference in your score.

3. Reduce the amount of debt you owe

Keep your balances low on credit cards and other revolving credit. The most effective way to improve your credit score is by paying down your revolving credit card debt. Come up with a payment plan that makes most of your monthly budget.

4. Increase your credit limit

If your account is in good standing, you will be granted for an increase in your credit limit. It is important not to spend the increased credit limit amount, so that you can have a lower credit utilization rate.

5. Don’t shut a credit card account

If you have taken a pledge to not your credit cards, it is best to not use them instead of closing them. Closing your credit card can hurt your credit score.

6. Monitor your payment history

Your payment history is the most important factor for your credit score. In order to improve your payment history you should always make payments on time. You must make at least the minimum payment if you can’t pay the full amount you owe. If you find trouble in paying the bills, contact your lender immediately.

7. Use your credit wisely

It is suggested that you should avoid going over your credit limit. Use only a percentage of your available credit. Try not to use 30% of your available credit in your card. Lenders will see you at a greater risk if you use a lot of your available credit limit in your card.

8. Increase the length of your credit history

It is considered to be better for a credit score if you have a credit account open or in use for a longer span of time. Your credit score may be lower if you have credit accounts that are relatively new.

9. Limit the number of credit applications or credit checks

If there are too many credit checks and applications in your credit report, lenders think you are desperate about getting finance and trying to build beyond your means. So, keep credit checks and applications as limited as possible.

10. Use different types of credit

It will affect your credit score badly if you keep using one type of credit product such as your credit cards. It is better to have mix of credit like a credit card, a car/home loan and a line of credit. A mix line of credit can help in improving your credit score if you pay back the borrower finance on time. Otherwise you end up hurting your credit score more by taking on too much debt.

11. Leave old debts on your credit report

If you want to improve your credit score, then it is necessary to have credit to begin with. Many new Canadians often run into this problem as they are just starting up to establish themselves financially. It can be a wise idea to keep old credit account open as the longer your history of using credit responsibly, the better.

12. Set up automate payments

If you have a bad or low credit score due to past credit defaults, you must consider setting up automatic payments for those debts that have fixed payments.

13. Use your credit more often

One of the best ways to repair your credit score is to use your credit more often. Credit is built on the basis of your repayment capability and as long as you pay your dues on time, you can able to manage your finances efficiently.

14. Have a secured credit card account

You can build your credit score by opening a secured credit card account. This account requires you to pay an upfront fee, but it can be used as a regular credit card. This kind of card is good for someone with a poor credit score or who may have a harder time in getting approved for a card or loan.

15. Keep your credit card balance low

It is not a good practice to have a high balance on your credit cards. Not paying off your credit card dues can affect your credit score badly. So, keep your credit to less than 30% of your available credit.

16. Avoid opening new accounts

It is a bad idea to open new credit accounts as lenders will not like it as to them it would mean that you are taking on more debt and may have problems in paying them off. So, keep your loan accounts to minimum.

17. Establish a credit score objective

The good way to enhance your credit score is by setting a goal and aim to achieve it. Like if your credit score is 620 then try to get up a credit score up to 670 within 100 days, by paying down your debt on time and avoiding new debt. For that you need to review your credit score regularly.

18. Sustain an emergency fund

Building for rainy days to six months to 1 year can help you keep your credit robust and avoid any errors on your credit card score.

19. Pay off debts in good standing

Focus on debts first rather than accounts that has already gone into collections. Unfortunately, accounts in collection have already made their entry to affect your credit score and it will remain on your credit report for seven years even if you pay them off. So, it’s best to put your money toward the accounts that can help you look better, quicker.

20. Become someone’s authorized user

If you have a friend or family member with a good credit history and score, see if they can consider adding you to a few of their cards as an authorized user. They are not giving you the card but letting you to soak up their solid credit card goodness to improve your credit score.

Representative Example:

The Representative APR is 1734% so if you borrow $275 over 359.40% p.a. (fixed) you will repay $357.36 in total.

Please note that payday loans are meant to be used for short term financial emergencies and are not designed to provide long term solutions

The operator of this website is not a lender and does not make credit decisions. The information you provide will be used in securing you a payday loan with one of our carefully selected panel of leading Payday Loan Lenders in USA. The personal, financial and employment information that we collect is stored electronically during the duration of the application and is removed from our system upon acceptance from the lender.


We expect you to repay your loan on the date agreed, so if you do not think you are in a position to make your repayment, please do not apply with us in the first place. It is not worth risking your credit rating for such a small amount.