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How to Increase Credit Score: Proven Steps to Success

Looking to give your credit score a lift? We’ll show you how to obtain your credit score, what it means, and how to get it into better shape.

Step 1: Get Your Credit Report and Score

Getting Your Credit Score

Your credit report and your credit score are two different things, and your report does not include your score. Your credit score shows you how lenders will view your creditworthiness. You can obtain your credit score through an Equifax or TransUnion subscription. Also, many of Canada’s major banks allow you to access your credit score online for free through their online banking platforms; however, the credit score provided by your bank may not be your official credit score according to Equifax or TransUnion.

Credit Canada will also discuss your credit score when you book a free Credit Building counselling session with us. This can be extremely valuable for people with a low credit score and high debt, but who also have a steady source of income.

Getting Your Free Credit Report

Credit reports are a record of your credit history, and they are maintained by credit bureaus, also known as credit reporting agencies. There are two credit reporting agencies in Canada – Equifax and TransUnion. You can get a free copy of your credit report once a year from each credit bureau, and it will not  affect your credit score. Your credit report contains the following information (but again, it doesn’t include your credit score):

  • Personal identification, possibly including employment information.
  • A record of which organizations have recently asked for your credit report.
  • Your payment history for accounts that are reported to the credit bureau.
  • Any information on the Public Record, such as collections, judgments, and bankruptcies.
  • Types of credit that you have (as seen on the chart below).

Step 2: How to Check Your Credit Rating

Each account shown on your credit report will have a rating, which reflects the type of credit and the current payment status of the account. The type of credit is indicated by a single letter and the payment status will be a number between 0 and 9. This scale is NOT linear - the numbers simply describe the current payment status. 

The tables featured here explain the meaning behind each letter and number for a credit rating. 

types of credit


Understanding your credit rating


Step 3: How Credit Scores Are Calculated

If you've ever used a credit card, have a cell phone plan or taken out a personal loan, then you've got a credit score.

Calculating Your Score

Your credit score is calculated by credit bureaus that convert information on your credit report to a number based on a formula called the “FICO formula.” Your credit score will be a number between 300 and 900. 

Here are the factors that make up your credit score and a percentage indicating how important they are when it comes to calculating your score.

  • Payment History (35% of your credit score) – how timely you’ve been when making payments on past and current debt.
  • Credit Utilization (30% of your credit score) – how much available credit you’re using.
  • Credit History (15% of your credit score) – the length of time you’ve been using credit for.
  • Diversity of Credit (10% of your credit score) –how many different types of credit you have.
  • Credit Inquiries (10% of your credit score) – the number of times you’ve attempted to obtain new credit.

What is a good credit score?

Generally, a credit score approaching 700 or above is looked at favourably by lenders, meaning you probably won’t be turned down for credit or a loan, and the interest rate will likely be reasonable. If your credit score is 800 or above, you’re in excellent shape.

credit score quality scale

According to FICO, for people with “normal” credit profiles, payment history and credit already used make up 65% of your credit score.

How to Increase Credit Score and Credit History

How to Build a Credit History

For anyone who has had credit problems in the recent past, here's how you can start taking steps to rebuild your credit.

  • Make payments on past-due accounts that haven’t gone into collections first. Getting current on these is more important, as you want to avoid having your accounts sent to collections, if and when possible. Accounts already in collections will remain on your credit report for 6 years regardless of repayment.
  • Contact those accounts in collections to see if it's possible to start paying back the debt, but make sure you notify the creditor, as well and get proof of payment. Before contacting collection agencies, be sure you know your rights. Some collectors may demand full payment of the debt and/or threaten legal action.
  • Consider applying for a secured credit card to assist you in rebuilding your credit rating. Secured credit cards are loaded with your own money, so you can’t overspend. Plus, they reflect positively on your credit report.

How to Build Your Credit Score

You may be looking for ways to improve your credit score fast, but it’s important to know that it can take some time and patience. However, to give your credit score a boost, you should remember to do (or start doing) each of the following:

  • Review your credit report at least once a year. If you find incorrect information, contact Equifax or TransUnion so they can start the Dispute Resolution process.
  • Pay all your bills on time! Most creditors will let you set email reminders, or you can create them on your smartphone, so you’re never late again.
  • Don’t apply for too much new credit in a short period of time; this can make it appear you are relying on  credit to make ends meet and raises red flags.
  • Don’t issue cheques when there are insufficient funds! (This is something else your bank might report to credit bureaus; you may want to consider overdraft protection).
  • Try to save 10-15% of your net income. If you're unemployed, try to save 2-3% of net income. Use our Budget Calculator to see how much you can save by making cuts in your spending.
  • Begin practicing better money management, such as budgeting and tracking your expenses. This will help you understand how much money you have coming in, and how much you have going out. That way, you can determine where you can cut back on  to pay down your debt—which kicks up your credit score! Use our free, downloadable Budget Planner + Expense Tracker.

How to Improve Your Credit Score with Credit Canada

There are a lot of myths and misunderstandings about credit reports. Our professionally certified Credit Counsellors will help you understand how credit reporting works and how you can improve your credit score.

Turn Your Credit Score Around

Want to rebuild your credit? Take advantage of our FREE Credit Building Counselling sessions by filling out the form below.