How to Improve Your Credit Score in 2024

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Your credit score in today's financial industry can greatly affect your life and finances. Applying for loans, getting good interest rates and even being approved for credit cards can be affected by your credit score. 

Are you worried about your credit score and are interested in how credit repair can help you? Are you wondering how to rebuild your credit in Canada and how long it takes to improve credit scores?

Good news! In this article, we will go over the various ways you can go about increasing credit score whether you are fixing bad credit or just trying to raise your credit from good to great.

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Keep in mind

What you need to know

  • A bad credit score can prevent you from taking out loans or a mortgage
  • Credit repair can help undo some damage
  • The process takes time. Expect a timespan of a year plus
  • Using credit cards responsibly can help your credit score

How to improve your credit score?

There are several ways to start fixing your credit score and depending on your current financial situation some may be easier than others. You should focus on the methods that can be implemented immediately and plan on the more long-term methods for the future. Remember that fixing credit scores is a lifelong effort and if left unattended your credit score will drop. First, let's create a baseline to understand your credit score.

Here is a chart measuring credit scores according to Consolidated Credit based on the FICO range:

Credit ratingCredit score
Credit rating to score equivalent

To start credit fixing you need to understand your credit score and what makes up this number. There are five general factors that create your credit score:

Payment History
Payment or credit history makes up the biggest portion of your score at 35%. This takes into account all your past payments as well as current account statuses. If you haven’t missed any payments or defaulted on any loans and all your accounts are in good standing this will greatly help your credit score. If you have had any bills go to a collection agency it will negatively affect your score and should be dealt with immediately.
Credit Utilization Ratio
This is the second biggest portion sitting at 30%. The credit utilization ratio (CUR) is the amount of credit you are using compared to the total available credit. To find this number you divide the amount of currently used credit by the total available credit. For example, if you owe $5,000 in credit card debt and have a credit limit of $20,000 you have a credit utilization ratio of 25%. The higher the CUR the more negatively it affects your credit score. It is recommended to keep your CUR at under 30%. Keep in mind that your CUR is calculated based on all forms of credit so you will need to take into account all your credit cards not just your best or worst.
Credit Age/Length of Credit History
One of the easiest ways to build a good credit score is to start young. 15% of your credit score is based on how long you have been using credit. The longer you’ve been consistently paying off your credit the higher your score. Starting with a low-limit no fees credit card at the age of 18 and paying it off consistently into your 20s is a great free way to build a long healthy credit history.
Types of Credit
Various types of credit account for 10% of your credit score. A mix of loans and credit cards that are consistently paid off shows knowledge and reliability when making future financial choices.
Credit Inquiries
Every time you apply for a loan your credit file is pulled a hard inquiry is added to your account. This shows that you are seeking credit and too many hard inquiries in a short span of time can negatively affect your credit score.
Calculate credit score

Now that we better understand credit scores we have a list of ways you can start to repair your credit. Many of these will relate to the factors that make up your credit score.

  • Making payments and paying off bills: the first habit you should make is to pay all your bills on time, all the time. This can be done by setting up automatic payments using credit card apps or setting reminders on your phone. You should try to pay off your balances completely at the end of every month but if you can’t make sure to make the minimum payment. This will not only improve your credit but also help avoid fees and increased interest rates. If you have any bills in the collection be sure to pay them off as soon as possible or they will continue to negatively affect your credit score.
  • Keep your credit utilization ratio low: if possible keep your CUR below 30%. It may seem redundant but raising your credit limit to keep your CUR lower will improve your credit score.
  • Keep old credit cards and accounts active: remember that first credit card that only has a $300 limit? Don’t cancel it! As long as old accounts are in good standing and you aren’t paying fees on them they are helping your credit score. They increase the average age of your credit.
  • Stop shopping for new credit cards: every time you apply for a new credit card it raises a flag on your credit account. Only apply for new cards when necessary and wait for responses rather than applying for several at once.

When do you need to use a credit repair service?

While there are many steps you can take and free services to help improve your credit sometimes you need help. Credit repair services can save you hundreds or thousands of dollars in interest as well as help you secure loans. There are two types of credit repair services, there are credit builders which are subscription services that help build and maintain credit over time and credit repairers which help deal with errors and mistakes on your credit reports. Here we will go over credit repairers.

If you are dealing with a bankruptcy, or believe that there are errors, mistakes or inaccuracies in your credit report, credit repairer services can help. First, you’ll need to obtain a copy of your credit report from a major credit agency in Canada. Equifax and TransUnion are two of the biggest and most trusted reporting agencies. You can then review your credit report and look for any mistaken transactions, inaccurate late payments or other false items negatively affecting your credit score.

Keep in mind you are looking for mistakes, if you made a late payment or have debts this will not fix them. You can then determine if a credit repairer is needed or if you can contact the proper reporting agencies yourself. Credit repairers are there to fill out the proper paperwork and dispute mistakes on your behalf. Besides accuracy, this saves you valuable time.

You should always research the credit repair company as well as try to solve the issue yourself. There are scammers out there but a credible credit repairer can help you save money and improve your credit score.

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How long does it take to repair credit?

It takes time to repair your credit score, anywhere from months to years, but each financial decision you make has a small impact which is why it is important to start immediately. According to the Financial Consumer Agency of Canada, it takes 30 to 90 days for transactions and payments to be reflected on your credit report. Each of these transactions will have a small change in your credit score. To see significant change will take at least 6 months but can be a year or longer.

How long does it take to repair bad credit?

A bad credit score of 500 or less will usually take about six months to a year to start to rebuild. Going from bad to excellent can take between three to five years depending on the circumstances.

How long it takes to go about fixing credit depends on why your credit is low in the first place. If you have short credit history and not much else you can fix your credit relatively easily. On the other hand, bankruptcy, a consumer proposal, and outstanding bills sent to collections require more time and effort to straighten out.

How to repair my credit score quickly?

While there is no one way to rapidly improve your credit score there are many things you can do and habits you can adopt to rebuild your credit.

Credit repair tips:

  • First, pay off all collections bills you have and pay all your credit cards off if possible. This will give some of the fastest results.
  • Ask for a credit limit increase on credit cards to lower your CUR.
  • Check your credit report and check for any errors. Either resolve them yourself or have a credit repair service assist you.
  • If you have any late payments on your record you can contact the company and ask for one-time late payment forgiveness.
  • If you can not pay off all your debt consolidate it into a low-interest balance transfer card or debt consolidation loan.
  • If you do not have a credit card and do not qualify for most cards, get a secured credit card. It will require a deposit and will have a low credit limit but is a good way to start building credit.

After you have completed all the immediate actions you can take you should start setting up habits to avoid late payments, a high CUR and other actions that will lower your credit score.

Start improving your credit score today.

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How can you fix errors on your credit report?

Sometimes mistakes are made and when this happens it can hurt your credit score. These mistakes can take many forms such as wrong personal information, inaccurate account status, expired negative transactions and even fraudulent charges. The worst part is you won’t even know these errors are affecting your credit score until you check.

  • To dispute errors, the first thing you’ll need to do is to get a copy of your credit report from a credit bureau. As stated above, you can do this free of charge using Equifax and TransUnion.
  • Next, you will look over the credit report to find any errors. In Canada, credit bureaus are obligated by law to verify the accuracy of credit reports free of charge.
  • Now if you found any errors you will dispute the errors by contacting your lender or credit company, verifying the mistake, and having them send the updated information back to the credit bureau. To ensure the fastest resolution you should inform both the credit bureau and the bank of the error so the information is received and updated with minimal delay
  • Depending on the complexity of the error and how long ago the error was made you may need to gather relevant documents providing additional information about the error.

How soon will my credit score improve after bankruptcy?

If it's your first time declaring bankruptcy you may qualify for an automatic discharge from bankruptcy after nine months. To do this you must meet all monthly payments, report to your trustee and attend credit counselling sessions. The sooner your bankruptcy is completed the sooner it will disappear from your credit report.

At this point, you can start to improve your credit score. You can expect to see improvements in your credit score a year after bankruptcy is completed but may take a few years before you will be able to get an excellent credit score.

As will all credit scores your progress will depend on your specific situation and your habits after completing your bankruptcy. Bankruptcies typically will still appear in your credit report for six or seven years after completion and may still affect loan and credit applications.

What are the best credit repair companies in Canada?

Credit repair companies oftentimes assist in the creation of stable credit-building accounts as well as help manage your finances to avoid late payments and overdrawing from accounts. They do this by either providing a financial platform or the proper information and resources to become financially educated. Below we will give an example of some of the top credit repair services, two focusing on creating a stable platform and the others focusing on the spread of information to help individuals improve their credit scores.

  • Koho credit building is an app designed to help users consolidate their finances into one manageable place while building their credit. They charge $7 per month for their services and provide free credit reports, a savings account and a credit-building prepaid card.
  • Refresh Financial is a credit-building lender service for people struggling to build credit and who don’t qualify for loans and credit cards. They offer a credit builder loan and a secured visa card.
  • Consolidated Credit is one of Canada’s oldest nonprofit credit counselling organizations. They have helped over 10 million people with their credit and credit card debt. For those of you looking for information on how to improve rebuild or improve your credit score, they provide information as well as individual counselling.
  • Credit Counselling Society is another non-profit Canada credit repair company dedicated to spreading information to help Canadians build credit and get out of debt. They have branches throughout Canada such as credit repair Toronto, credit repair Ontario and credit repair Montreal.

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How can using credit cards improve your credit score?

If you are eligible for one, credit cards are a great low-risk way to improve your credit score. Every time you use a credit card and pay it off at the end of the month you are creating a positive credit transaction. By using the credit card you are accumulating debt, by paying it off you are raising your credit. As long as you make sure to not spend more than you can pay off you have a way to consistently improve your credit score without ever paying fees or penalties.

As your finances and spending increase, you should raise the credit limit on your credit card to keep your CUR low. This will further improve your credit while also showing that you are financially stable and responsible enough for future loans.

Credit cards may come with their own fees and should be researched separately. You must also make sure to not exceed your spending limit or get to the point that you can not pay off your credit cards as that is when your credit cards will start to negatively impact your credit score.

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Alexandre Desoutter

Alexandre Desoutter has been working as editor-in-chief and head of press relations at HelloSafe since June 2020. A graduate of Sciences Po Grenoble, he worked as a journalist for several years in French media, and continues to collaborate as a as a contributor to several publications.