Header bg
Apollo logo
Apollo logo mobile
  • Tenant Insurance
  • Student Tenant Insurance
  • Homeowner's Insurance
  • Condo and Townhouse Insurance
  • Landlord Insurance
  • Get A Quote
  • Get A Quote
  • section background

    How to Improve Your Credit Score in Canada

    Hero bg 2
    how to improve your credit score canada

    Having a good credit score is essential for lots of things, from applying for loans to getting approved for down payments. Read this article for tips to improve your credit score.

    Your credit score is a critical factor in your financial health. It affects everything from your ability to get approved for credit cards and loans to the interest rates you’ll pay on the money you borrow. In short, your credit score is a snapshot of your creditworthiness. If your score is low, it can be challenging to get the credit you need, but don’t worry, there are plenty of steps you can take to improve it. In this guide, we’ll cover everything from understanding credit scores to proven strategies to boost your creditworthiness. Whether you’re just starting to build your credit or trying to rebuild it after a difficult time, this guide is for you.

    Limited time offer: Get comprehensive Tenant Insurance starting at just $11/month

    Get no-nonsense coverage that's the best value for your money. Purchase in less than a minute, receive your policy instantly, and save when you buy online.

    Get a free quote

    4.6 rating

    Google Logo

    Understanding Credit Scores

    Before we dive into how to improve your credit score, let’s first look at what it is and how it’s calculated. Credit scores range from 300 to 850, with higher scores indicating better creditworthiness. Lenders and other financial institutions use credit scores to evaluate the risk of lending to you. Your credit score is calculated based on several factors, including your payment history, credit utilization, credit mix, length of credit history, and recent credit inquiries. Understanding these factors is the first step in improving your credit score.

    How to Improve Your Credit Score

    Improving your credit score doesn’t happen overnight, but there are several steps you can take to get started. The first and perhaps most crucial step is to pay your bills on time and in full. Payment history is one of the most important factors in calculating your credit score, so it’s crucial to avoid late payments or missed payments altogether. Making on-time payments shows lenders that you’re a reliable borrower, and it can also help you avoid late fees and other penalties. If you’ve missed payments in the past, start by making your payments on time today and continue to do so moving forward.

    Get a quote in less than a minute

    Get no-nonsense coverage that's the best value for your money. Purchase in less than a minute, receive your policy instantly, and save when you buy online.

    Strategies to Maintain a Good Credit Score

    Let’s take a look at some common strategies that you can use to make sure you keep your credit score low.

    1. Keep credit utilization low

    Another key factor in improving your credit score is keeping your credit utilization low. Credit utilization is the amount of credit you’re using compared to your total available credit. For example, if you have a credit card with a $5,000 limit and you’ve charged $2,500, your credit utilization is 50%. A high credit utilization can signal to lenders that you may be relying too much on credit and may be a riskier borrower. To improve your credit score, aim to keep your credit utilization below 30%. If you’re struggling with high credit card balances, consider paying down your debts or asking for a credit limit increase (but be careful, as this can also result in a hard inquiry on your credit report).

    2. Diversify your credit mix

    Diversifying your credit mix is another way to improve your credit score. When you have different types of credit accounts, such as a mortgage, car loan, and credit card, it shows lenders that you’re capable of managing a range of credit types responsibly. Having a diverse credit mix can also help mitigate the impact of negative information on your credit report. For instance, if you have a missed credit card payment but have a successful track record of paying your mortgage on time, your credit score won’t be impacted as much. To diversify your credit mix, consider adding a different type of credit account to your portfolio or explore other credit-building options. Just be sure to keep your total amount of credit under control and don’t apply for too many loans or new credit cards at once, which can hurt your score.

    Limited time offer: Get comprehensive Tenant Insurance starting at just $11/month

    Get no-nonsense coverage that's the best value for your money. Purchase in less than a minute, receive your policy instantly, and save when you buy online.

    3. Limit credit applications

    Another important factor to consider is limiting your credit applications. Every time you apply for credit, it generates a hard inquiry on your credit report. Too many inquiries in a short period can lower your credit score and signal to lenders that you may be a risky borrower. So be strategic about when and how ofen you apply for credit. If you’re looking to apply for a loan, try to do all your applications within a short time frame to minimize the impact on your credit score. And if you’re not sure if you’ll qualify for credit, consider checking your credit score and reviewing your credit report in advance to assess your eligibility.

    4. Fix credit report mistakes

    Fixing any mistakes on your credit report is also a crucial step in improving your credit score. Errors on your credit report can negatively impact your score and make it harder to qualify for credit. Some common mistakes include inaccurate late payment information, incorrect account balances, and fraudulent accounts. If you spot any errors on your credit report, be sure to dispute them with the credit bureaus. You can do this by sending a letter to the credit bureau(s) in question explaining the error and any supporting documentation. Once the credit bureau investigates the dispute, they will either correct the error or request additional information from you.

    Get a quote in less than a minute

    Get no-nonsense coverage that's the best value for your money. Purchase in less than a minute, receive your policy instantly, and save when you buy online.

    5. Set up payment reminders

    Setting up payment reminders is another way to ensure that your credit score stays healthy. Missing payments is one of the most significant factors that can lead to a poor credit score. By setting up payment reminders, either through your bank or financial institution or using a calendar, you’ll be able to avoid late or missed payments that can lower your credit score. Payment reminders will alert you when your payments are due, giving you enough time to schedule payments and avoid any late fees. It’s also essential to be on top of your payment schedule and try to make payments earlier than the due date. This practice will reduce the likelihood of missing payments and build a more robust credit score.

    6. Monitor your credit score regularly

    Monitoring your credit score and accounts regularly is an essential step in maintaining a good credit score. By regularly checking your credit score, you can track your progress over time and spot any potential issues early on. You can use a credit monitoring service or sign up for free credit score tools such as Credit Karma or Credit Sesame to help you stay on top of changes to your credit score. Additionally, review your credit reports annually to ensure accuracy and identify any errors or fraudulent activity. Catching potential problems early can give you enough time to take steps to protect your credit score and financial reputation.

    APOLLO offers affordable tenant insurance, no matter your credit score. Get a free quote in less than a minute and we’ll send your policy documents directly to your inbox.

    Limited time offer: Get comprehensive Tenant Insurance starting at just $11/month

    Get no-nonsense coverage that's the best value for your money. Purchase in less than a minute, receive your policy instantly, and save when you buy online.

    Originally published April 24, 2023, updated September 7, 2023

    Back to APOLLO Magazine
    Share this article

    Limited time offer: Get comprehensive Tenant Insurance starting at just $11/month

    Get no-nonsense coverage that's the best value for your money. Purchase in less than a minute, receive your policy instantly, and save when you buy online.

    Limited time offer: Get comprehensive Tenant Insurance starting at just $11/month

    Get no-nonsense coverage that's the best value for your money. Purchase in less than a minute, receive your policy instantly, and save when you buy online.

    Relevant articles

    section background
    section background

    Getting insured is as easy as 1 - 2 - 3

    Tell us (very little) about yourself
    1

    Tell us (very little) about yourself

    Just tell us your address, your name, email and phone number. And that's it. We'll give you a price in less than a minute.

    Pay online easily and securely
    2

    Pay online easily and securely

    You can choose to pay monthly or save money by paying for the entire year in one easy payment.

    Get your documents in your inbox - instantly
    3

    Get your documents in your inbox - instantly

    As soon as you complete your purchase, you'll find your proof of insurance and policy documents waiting for you in your inbox.

    Get covered today - it couldn’t be easier

    We’ve provided more than 1,000,000 quotes to Canadians just like you. Give it a try!

    Google Logo

    Reviews

    4.6 rating

    1,472 reviews

    view all

    Across Canada

    Contact Us
    Apollo logo

    © 2024 APOLLO Insurance Solutions Ltd.

    111 Water Street, Unit 210, Vancouver, British Columbia, V6B 1A7

    APOLLO Insurance Agency Ltd. (o/a APOLLO Brokerage in the province of Ontario only) is a licensed retail brokerage, offering our clients with a comprehensive set of insurance solutions to meet their individual needs. APOLLO Insurance Agency Ltd. maintains necessary corporate licensing in provinces across Canada. Availability of products and service depends on licensing and product availability. The information that appears on this page is provided for information purposes only. Advertised products and prices are not guaranteed and vary based on insurance provider and/or insurance company's discretion and product availability.

    Transparency and Disclosure: APOLLO Insurance Agency's role is to provide you with exceptional service and the best insurance products that suit your needs. As a licensed retail brokerage, our compensation is based on a commission basis already built into your insurance premium and varies based on the product purchased through our platform. For a description of how APOLLO Insurance Agency is compensated and how this is calculated, please refer to our Compensation Disclosure document. For consumers in Ontario, please review the RIBO Conduct Fact Sheet and the RIBO Conduct Guidance document.