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An essential guide on how to improve your credit score in Canada.

Your credit score can affect your ability to get a loan or a mortgage, the rates you pay to creditors, and even whether you can rent an apartment. That’s a lot of power in the three numbers that make up your credit score. If you lack credit or have a score that isn’t as high as you’d like, you’ll want to learn how to build credit. That’s where this article comes in. Read on to find out how to improve your credit score and ways to raise your credit score fast.

Tips on How to Improve Your Credit Score

Starting from scratch is one thing, but what if you already have a credit score that’s low? Getting your rating back on track can be a challenge, particularly if you’re carrying outstanding debt, but it’s not impossible.

Get a Low-Interest Credit Card

For the debt-averse, this might seem like a bad idea, but responsible credit card use—meaning that you pay it off on time and in full each and every month—is a great way to build up a good credit score. When searching for which card to get, you might be stuck with slim pickings if your credit score is in the dumpster or you’re carrying high-interest credit card debt. If you’re anxious about racking up interest charges, you might try a low-interest credit card. These cards offer much lower interest rates than traditional ones (that typically charge 19% or higher) — making any outstanding debt more manageable and easier to pay down. And ultimately, that smooth move will help you boost your credit score!

One of the best options is the HSBC +Rewards™ Mastercard®. It offers a low-interest rate of 11.9% on purchases, balance transfers, and cash advances — one of the lowest in Canada. Plus, you’ll earn rewards for every eligible purchase charged to the card.

Learn more about the HSBC +Rewards™ Mastercard® Credit Card.

Get a Balance Transfer Credit Card

The first step to boosting your credit score is to pay off your debt. Carrying outstanding debt is a sure-fire way to suppress your credit score so prioritize debt repayment before other expenses. If you carry substantial credit card debt, your best bet is to move it to a balance transfer credit card with a low (or no!) interest rate. Not only does this help in consolidating your bills, but it will also dramatically reduce the amount of interest you’ll pay.

Get Automated Advice

Adding MyMarble.ca to the mix can help, as it offers a service called Score-Up — “smart” consultation software that can help you achieve your desired credit score fast. This online tool uses a computer algorithm to analyze your credit score and then tells you what action to take to increase your credit score as quickly as possible. It will even tell you which days to make purchases and which days to make payments in order to boost your credit score to the max. If you follow its advice and act responsibly, you could see an increase in your score in as little as 3 months.

Learn more about Score-Up

Get Into a Credit-Boosting Program

If you’re currently in consumer proposals (which is like bankruptcy), all is not lost. Fast-Track is a credit building program from MyMarble.ca designed to help you out of your obligations while raising your credit score. Through a structured loan plus advice, Fast-Track offers lower interest rates and even incentivizes you with a 4% bonus if you pay off your debt within two years. FYI: due to the COVID-19 economic situation, Marble won’t be funding Fast-Track loans until early 2021. Applications are still being accepted, but won’t be processed until early 2021.

Learn more about Fast-Track

How to Build Credit

One common misunderstanding about credit is that having no credit rating is the same as having good credit. That’s not how credit scoring works. If you’ve made the decision to avoid using credit altogether,  you may be debt-free, but you’ve limited the options for your future self. If you’re wondering how to build credit, it’s easier than you might think.

Get a Secured Card

If you’ve got no credit history or a bad credit score, getting a secured card can be a solid option. With a secured card, you deposit security funds to your account. It demonstrates to credit card providers that you’re serious about establishing a solid credit history. Generally speaking, the amount you deposit typically corresponds with the credit limit you’re given.

We’re fans of the Home Trust Secured Visa, as it gives you absolute control over your spending while building your credit rating. Designed to work like a debit card, you simply load money onto the card before using it so there’s never any risk that you’ll ever spend more than what you’ve loaded onto it. Another great option is the Refresh Financial Secured Card. Refresh Financial reports your responsible use to the credit bureaus which helps you build a credit history. Read more about the best cards for bad credit.

Learn more about the Refresh Financial Secured Card

Get (and Pay Back) a Personal Loan

One way to build a positive credit rating is to take out a personal loan and make regular, on-time payments. Refresh Financial offers a product called the Credit Builder Loan for loans of up to $25,000. Unlike a traditional loan, the loan amount goes into a secure account at a financial institution. As you make payments—all of which help build your credit history—you receive the money.

Get Online Credit Advice

Canadian financial technology company MyMarble.ca takes a more directed, bespoke approach to credit. When you sign up with its tool, Score-Up, you receive an evaluation and data-driven advice on how to reach your credit target. The subscription fee is $29.99 per month and every payment is reported directly to the credit bureaus so your score is positively impacted simply by using the service.

Learn more about Score-Up

How to Rebuild Your Credit Score Fast

Rebuilding your credit score is a task that can take time. The credit bureaus receive information from many sources and some of them, like your utilities or credit card providers, bill monthly. That said, it can take up to 90 days for a new product (like a credit card or loan, perhaps from an online platform like Loans Canada) to show up in your account. But what if you don’t have time to wait? If you’re looking into applying for a mortgage or getting a car loan you might not want to wait for the choice and better interest rates that come with a high credit score. If you have a pressing reason to get a better credit score, there are actions you can take.

Before anything else, you need to do the following:

  • Review your credit report. You can get it for free from Equifax Canada and TransUnion Canada. Note: the request does not affect your score. If there are errors, reach out to your creditors to have your account updated.
  • Tweak your credit utilization. One thing that impacts your credit rating is the percentage of your available credit in use. Make sure you’re carrying a low debt load and resist maxing out your cards. If your credit utilization is high, consider getting a limit increase. If this isn’t available to you, another strategy is to become an authorized user on someone else’s account. For example, a trusted family member or friend may add your name to their credit card account, thus increasing the amount of credit available to you and lowering your utilization rate. Just be sure you don’t spend against this credit!
  • Avoid actions that trigger credit checks. One of the most common is new card applications. If you’re thinking about changing your cards (like transferring to a low-interest product), don’t test drive. Keep your number of applications to a minimum.
  • Make an offer. Did you know that you can offer your creditors a partial payment on your debt? If you negotiate well, you just might be able to settle an outstanding debt.

Perhaps you have done all these things and your score is still lower than you’d like. This is when you might seek assistance from a company like MyMarble.ca. With Score-Up, you have the benefit of expert advice and counselling to get your score up, fast. It’s the only solution in Canada that leverages a combination point deduction, credit monitoring, and budgeting technology to significantly improve your credit score in as little as 3 months.

Frequently Asked Questions About How To Improve Your Credit Score

If you’re looking to raise your credit score in 30 days, start by correcting any errors on your credit report. Rebalance your credit utilization so that you’re using a lower percentage of your available credit. Offer your creditors a partial payment to discharge outstanding debts. And, as always, make sure you pay your bills in full and on time. If you cannot pay in full, make the minimum payment. You can also sign up for a credit coaching service like Score-Up by MyMarble.ca, which can help you significantly boost your score in as little as 3 months.

An increase of 100 points on your credit score will usually take more than one month. That said, if you get rid of your consumer debt, pay your bills in full and on time, and maintain a diversified mix of consumer and secured borrowing, you will see an increase over time.

If you're on the verge of bankruptcy and your score is really low, there are options. With a Fast-Track loan with MyMarble.ca, you get an immediate credit score boost: your credit score will instantly increase from 30 to 70 points and continue to increase depending on your financial habits.

The answer to this is going to depend on many factors. Generally speaking, while it’s possible to improve your credit score by a few points over the course of a couple of weeks, more significant changes typically take months or years. If you’re starting from scratch, it’s possible to build a decent credit score in about one month. If you’re trying to raise a low score, it will take much longer because you will need time to demonstrate responsible credit use. If you use a credit coach like Score-Up by MyMarble.ca, it can help increase your score in as little as 3 months.

Last Words

Your credit score is one of the most important factors when it comes time to apply for a mortgage, make a big purchase like a car, or take out a personal loan. A better score will not only broaden your choices but also give you access to lower interest rates. Whether you’re just starting out and building your credit or repairing a score that’s gone wrong, taking these steps towards a healthier credit rating is a gift to your financial future.

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