Every time you have a payment due or consider changing service providers, you have an opportunity to improve your credit score.
Here are 6 tips to help you get a good credit score in Canada:
Make your payments on time, every time. Keep a calendar or create phone alerts so you never miss a payment.
Make payments in full – even if it’s tempting to just pay the minimum amount.
Use less than 25% of your available credit (i.e., if your credit limit is $1,000, keep your balance at or below $250). This little trick shows lenders you don’t “need” all the money you have access to.
Stop opening new accounts. Before opening new credit cards, bank accounts, mortgages, utilities accounts, phone lines, etc., consider that every time you apply for credit or open a new account, this activity is reported on your credit file. Too many new accounts show you are looking for money and may be in a more perilous financial position.
Consider increasing your credit limit when the opportunity arises. Every now and then your lender may offer a limit increase on your credit card or line of credit. If you’re in good financial standing, accepting the credit limit can help you keep your credit use below 25% (see tip #3).
Make sure you know every time your credit is being checked. While a “soft” credit check has no impact on your credit score, a “hard pull” or “hard check” does. More than two hard credit checks in six months can negatively impact your credit score, since it demonstrates credit-seeking behavior (suggesting you need to borrow money).