Your credit score in Canada is calculated by two major bureaus — Equifax and TransUnion — and lenders use it to decide whether to approve you for credit and at what interest rate. A higher score can save you thousands of dollars over the life of a mortgage or car loan. The good news: scores can move up faster than most people think if you focus on the right things.
Both Equifax and TransUnion use scoring models that weigh the same core factors, though the exact weighting varies slightly between them. Here is what matters most:
If your credit cards are near their limits, paying them down can produce a meaningful score increase within one to two billing cycles. Aim to get each card below 30% of its limit. If you can get below 10%, even better. This directly affects your utilization ratio, which makes up nearly a third of your score.
Set up automatic minimum payments for every credit product. A single payment that is 30 days late is reported to both Equifax and TransUnion and can knock 50 to 100 points off your score. If you have missed payments in the past, the damage fades over time — but only if you maintain a perfect record going forward.
Errors on credit reports are more common than people realize. You are entitled to a free credit report from both Equifax and TransUnion by mail in Canada. Review them for accounts you do not recognize, incorrect balances, or outdated negative information. Disputing and correcting errors can result in a fast score improvement with no other changes needed.
Closing a credit card reduces your total available credit, which increases your utilization ratio. It also shortens your average account age. Unless a card has a high annual fee you cannot justify, keep older accounts open and use them occasionally to keep them active.
If a family member or partner has a credit card with a long history and low utilization, being added as an authorized user can add that positive history to your credit file. This works in Canada but check with the specific card issuer, as not all of them report authorized user activity to the bureaus in the same way.
If your score is low and you are having trouble getting approved for regular credit, a secured card is a reliable way to build positive history. You deposit money as collateral and use the card like a regular card. Over six to twelve months of responsible use, your score will improve.
Every time you apply for credit, a hard inquiry is placed on your file. Multiple hard inquiries in a short period signal risk to lenders and can lower your score. Only apply for credit when you genuinely need it. Rate shopping for mortgages or auto loans within a short window (typically 14 days) is treated as a single inquiry by the scoring models.
Small improvements can show up within 30 to 60 days, especially if you pay down balances quickly. Rebuilding from significant damage — like a missed payment or collections account — typically takes six months to two years of consistent positive behaviour. The bureaus update your file each time your lenders report, which is usually monthly.
Improving your credit score is less about tricks and more about consistent behaviour. Pay on time, keep utilization low, monitor your reports annually, and avoid unnecessary applications. Over time, these habits compound into a strong credit profile that gives you access to better rates and more financial flexibility.
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