How to improve my credit score

Here are concrete strategies to improve your credit score, especially if you live in Quebec and are aiming for a future mortgage.

1. Pay all your bills on time (priority #1)

The largest part of your credit score comes from your payment history.

• Set all your payments on automatic withdrawal or reminders (utilities, hydro, cards, cell, auto loan, etc.).
• Even a late payment of more than 30 days on a card or loan can hurt a lot.
• If you are already late, bring the accounts up to date as soon as possible: the older a “in default” information is, the less it weighs on your score.

2. Reduce the balance on your credit cards

Banks look at the used/revolved credit ratio (credit utilization).

• Aim to use less than 30% of your limit per card.
• Example: limit $3,000, ideally stay under ~ $900.
• If everything is often maxed out, your credit score drops, even if you always pay the minimum.

Tips:

• Make more than one payment per month (e.g., after payday).
• If possible, request a higher credit limit (without increasing your spending) to improve the ratio.

3. Maintain age on your accounts

History also affects your credit score.

• Avoid closing your oldest credit card, especially if it is well managed.
• If you want to simplify, start by closing the recent and costly cards (high annual fees).

4. Limit new credit inquiries

Each new application triggers a “hard inquiry” that can lower your credit score in the short term.

• Avoid making several applications for cards, loans, or lines of credit in a short period.
• Before a mortgage loan application, try to have 6–12 months without unnecessary new debt.

5. Diversify, but without overdoing it

Having only one credit card isn’t bad, but a reasonably diversified profile can help (e.g., card + a small auto loan or personal loan well managed).

• There’s no need to open many accounts just to “diversify.” Better to have a few well-managed accounts.

6. Monitor your credit file

In Canada, the main bureaus are Equifax and TransUnion.

• Check your file at least once a year.
• Correct errors (duplicates, payments showing as late when they’re current, accounts that aren’t yours).
• This can improve your credit score without even changing your payment habits.

7. If you’re in trouble, act before disaster

If you know you’ll have trouble paying:

• Call your creditors before missing a payment to negotiate an arrangement (reduced payments, deferment, etc.).
• A well-kept arrangement is less damaging than a series of delinquencies and collections.

8. Connection with obtaining a mortgage

For an insured mortgage (with CMHC, especially with a down payment < 20%) :

• Typically at least one borrower must have a credit score around 600 minimum.
• For the best rates, lenders like to see 650–680 and above.
• A good credit score gives you:
• access to more lenders;
• better rates;
• more flexibility on amortization and terms.

If your credit score is lower, you can sometimes still obtain a mortgage through an alternative or private lender, but :

• higher interest rates;
• often higher down payment;
• more restrictive terms.

That’s why it’s important to work on your credit score 6–24 months before jumping into a purchase.

9. Simple 6–12 month action plan

1. Put all your payments on automatic withdrawal or reminders.
2. Bring card usage to < 30 % of their limit (ideally even lower).
3. Stop opening new cards/loans unless truly necessary.
4. Keep your oldest card open and manage it well.
5. Check your Equifax/TransUnion file and correct errors.
6. If you’re aiming for a mortgage soon, keep your situation stable (job, debts, payments).

By applying these steps consistently, your credit score should gradually improve, which will increase your chances of getting a favorable mortgage in Quebec.