How to Increase Credit Score In Canada: 8 Must-Know Tricks

Most methods to increase credit score quickly can be relatively unknown. As your credit history usually takes at least that long to create and then reflect any changes, it’s difficult to make anything to do with credit scores most quickly. Or is it?

 

We know of a few ways you can improve your credit score quickly without having to wait months. Our customers have used these techniques to make gains on their credit scores within 60 days. That’s fast in the financial world!

 

If you’re planning for a car loan shortly, these tricks can help.

1. Never Miss Payments

Your payment history makes up 30% of your credit score. Making payments on time, all the time can have a hugely beneficial effect. Set up automatic payments (which we'll talk about below) or payment reminders and make sure to never miss a payment and watch your score grow.

 

 

If you have missed payments, you can recover. Following the advice above should help you develop a positive payment history that can overcome that initial situation.

 

2. Shop With Credit

One of the easiest ways to increase your credit score quickly is by swapping to a credit card for your regular shopping. One of the key factors for calculating your credit score is credit history and using credit cards will help build up that history with lots of small loans.

 

As long as you're able to pay the credit back in a timely fashion this is by far the easiest way to build credit.

 

3. Rebalance Your Credit Utilization

Credit utilization is second only to payment history in making up your credit score. If you can do anything to balance that utilization, it can impact your credit score quickly.

 

Credit utilization is the amount of available credit you are using. The more credit you use, the higher your utilization ratio. While there isn’t a ‘perfect’ ratio, it is widely accepted that 30% or below is the ideal.

 

Pay off any debts you can, especially credit cards can reduce your utilization ratio. This in turn can begin increasing your credit score quickly from the next payment cycle.

 

For example, say you have two credit cards with a total credit limit of $10,000. You’re using $4,000 of that which means your utilization stands at 40%.

 

That’s over the ideal, so paying off even $1,000 of that brings you under the ‘ideal’ limit which will have a beneficial effect on your credit score.

 

4. Increase Credit Limits

Another of the many factors that goes into calculating your credit score is your “credit utilization ratio” which is a measure of how much credit you are using vs how much you have access to use.

 

 

As a general rule you want that ratio to be big, meaning you want to have access to a lot of credit but not be using it all at once, and a very easy way to do that is to increase your credit limit, the bigger the limit, the better for your credit score

 

5. Prioritize Expensive Debt

If you’re managing multiple debts, pay off the most expensive first. When you perform your financial audit, order your debts with the highest interest rates first and lowest rates last.

 

Prioritize paying the most expensive debt first. That way you will get everything under control faster and pay out a lot less in interest.

 

6. Check for Mistakes on Your Credit Report

Correcting mistakes in your credit report is the single easiest way to increase your credit score quickly. That is if there are any mistakes to correct.

 

Credit reference agencies are very good at what they do but they aren’t perfect. Mistakes happen. Creditors or agencies who add notes to your credit report can also make mistakes.

 

 

Checking regularly for mistakes can have a serious impact if someone gets something wrong.

 

You’re allowed one free credit report per year from the main agencies while some financial products offer them as part of their service. Check yours regularly for errors or mistakes and contact the organization who made the mistake and have them correct it.

 

You can contact the credit bureaus themselves but it’s easiest to contact the organization that made the error on your report and have them do it.

 

Make sure to monitor your credit report to make sure they take action. If they don’t, keep on top of it until they do. It’s their responsibility to provide accurate information, not just yours.

 

7. Only Apply for Credit You’re Going to Use

If you’re shopping around for a credit card or car loan, only apply for the product you want. Don’t apply for a range of products just to see what’s best. Use pre-approval tools for that.

 

Pre-approvals use soft inquiries which do not impact your credit score. Credit applications use hard inquiries that do impact your credit score. Most financial products have some form of preapproval tool to let you know whether you’ll qualify or not before you apply.

 

8. Set up Automatic Payments for Everything

Automatic payments are a genuine lifesaver. They ensure you never miss a payment and keep your payment history clean. As that payment history can be up to 30% of your credit score, this is definitely something you should do right away.

 

Automatic payments also make life easier. Set it up, make sure there are sufficient funds to pay everyone and then forget about them. Easy!

 

 

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