Your credit score in Canada can be improved — sometimes substantially — with targeted, consistent action. The five factors that make up your score (payment history, utilisation, credit history length, credit mix, and new inquiries) are all within your control to varying degrees. Here is what actually works.
The 10 Steps That Raise Canadian Credit Scores
1. Pay Down Credit Card Balances — The Fastest Win
Impact: High | Timeline: 30–60 days after reporting
Credit utilisation (your balance as a percentage of your credit limit) accounts for approximately 30% of your score. The lower your utilisation, the better.
| Utilisation Rate | Approximate Impact |
|---|---|
| Below 10% | Optimal |
| 10–30% | Good |
| 30–50% | Neutral to slightly negative |
| Above 50% | Negative |
| Above 75% | Significantly negative |
What to do: Focus extra payments on the card with the highest utilisation first. If you have $3,000 across one card with a $5,000 limit (60% utilisation), paying it to $1,500 (30%) will show a meaningful score improvement once the lower balance is reported.
Pro tip: Your utilisation is measured at your statement date, not your payment due date. Paying before the statement is generated reports a lower balance to the bureau.
2. Never Miss a Payment — The Foundation
Impact: Very High | Timeline: Ongoing
Payment history is the single most important factor — approximately 35% of your score. A single missed payment (30+ days late) can drop a good score by 50–100 points and stays on your report for 6 years.
What to do:
- Set up autopay for at least the minimum payment on all credit cards and lines of credit
- Set calendar reminders for any bill not on autopay
- If you know you’ll miss a payment, call the issuer in advance — some will defer without reporting to the bureau
3. Request a Credit Limit Increase (Without Spending More)
Impact: Medium | Timeline: 30–60 days after reporting
If your balance is stable but your limit increases, your utilisation drops — without paying a single extra dollar. Most major Canadian issuers allow limit increase requests online:
- TD: Via online banking under account settings
- RBC: Via online banking or the RBC app
- Scotiabank, BMO, CIBC: Via the bank’s app or by calling
Note: Some issuers do a hard inquiry for limit increase requests, which temporarily lowers your score by a few points. Ask whether the request will trigger a hard inquiry before proceeding.
4. Don’t Close Old Credit Cards
Impact: Medium | Timeline: Prevents score decline
The age of your oldest account and the average age of all accounts affect your score. Closing old cards — especially your oldest — shortens your credit history.
What to do instead: If you want to stop using a card with an annual fee, call the issuer and ask to downgrade to a no-fee version of the same card. This keeps the account open (maintaining your history) without the ongoing cost. Many Canadian banks offer no-fee alternatives (e.g., TD Rewards Visa for TD Aeroplan holders who want to downgrade).
5. Limit Hard Inquiries
Impact: Low to Medium | Timeline: Immediate; fades over 12 months
Each formal credit application (mortgage, car loan, credit card) creates a hard inquiry that temporarily lowers your score by approximately 5–10 points. Multiple applications in a short period compound the effect.
What to do:
- Apply only for credit you genuinely intend to use
- Research pre-qualification or pre-approval tools (many banks and fintechs offer soft-inquiry pre-approvals that don’t affect your score)
- Space out credit applications by 3–6 months when possible
- Exception: Multiple mortgage or auto loan inquiries within 14–45 days are typically counted as one by credit scoring models
6. Get a Secured Credit Card (If Starting From Zero or Rebuilding)
Impact: High (for those with no or poor credit) | Timeline: 6–12 months to see material improvement
If your score is low because of past issues or a limited history, a secured credit card is the most accessible way to build positive payment history.
Best secured credit cards in Canada:
- Home Trust Secured Visa — 1% cash back, $0 annual fee
- Neo Financial Secured Mastercard — 5% average at Neo partners
- Capital One Guaranteed Mastercard — No credit check approval
Use the secured card for small, recurring purchases and pay the full balance monthly. After 12–18 months of on-time payments, many banks will upgrade you to an unsecured card and refund your deposit.
7. Diversify Your Credit Mix
Impact: Low to Medium | Timeline: Years
Having a mix of revolving credit (credit cards, lines of credit) and installment loans (car loans, mortgage) signals to lenders that you can manage different types of debt. Credit mix accounts for approximately 10% of your score.
What to do: If you only have credit cards, a small credit-building loan or a personal line of credit can improve your mix. However, don’t take on debt specifically to diversify — only borrow what you have a genuine need and plan to repay.
8. Check Your Credit Report for Errors and Dispute Them
Impact: Variable (potentially very high if errors exist) | Timeline: 30–60 days after dispute resolution
Errors on Canadian credit reports are more common than many people realise — wrong payment status, accounts that aren’t yours, outdated collections that should have aged off. A single error reporting a payment as “late” when it was on time can suppress your score significantly.
How to check for free:
- Borrowell — free Equifax score and report at borrowell.com
- Credit Karma Canada — free TransUnion score and report at creditkarma.ca
How to dispute: Use Equifax’s online dispute centre (equifax.ca) or TransUnion’s dispute portal (transunion.ca). Provide documentation. Bureaus must investigate within 30 days.
9. Consider a Credit-Builder Loan
Impact: Medium | Timeline: 6–24 months
Some Canadian credit unions and fintechs (KOHO, Refresh Financial, Spring Financial) offer credit-builder loans specifically designed to establish a payment history. You “borrow” a fixed amount that is held in an account while you make monthly payments; at the end of the term, the funds are released to you. The value is the reported payment history, not the loan proceeds.
10. Be Patient and Consistent
Impact: Very High | Timeline: 12–36+ months
Credit scores improve through accumulated positive behaviour over time. There are no legitimate shortcuts. Services claiming to “erase” negative items or “fix” your credit for a fee are scams — only time, accurate dispute resolutions, and positive payment behaviour improve a credit score sustainably.
What Won’t Work (Common Myths)
| Myth | Reality |
|---|---|
| “Paying utilities and rent improves my score” | Only if using a specific reporting service (Chexy for rent; utility debt CAN hurt if sent to collections) |
| “Carrying a small balance is better than paying in full” | False — paying in full is always better for your score and saves interest |
| “Credit repair companies can remove legitimate negative items” | False — only inaccurate items can be legitimately removed |
| “Income affects your credit score” | False — income is not in your credit file or score calculation |
| “You need to be in debt to have a good score” | False — using credit responsibly (and paying it off) builds credit without carrying balances |