Tips For Buyers & Sellers

5 Tips to Improve Your Credit Score

One of the most important factors in being approved for a mortgage is your credit score. This quick blog post will provide you with some helpful tips to improve your credit, which can increase your likelihood of being approved for a mortgage— including how much you can borrow in total, as well as at what interest rate.


Put simply, a credit score is a numerical representation (between 300 and 850) of how likely you are to be able to pay back a loan on time. It’s based on a variety of factors and reports, but the higher the score, the more trustworthy you’ll look to potential lenders.

How Can I Find Out My Credit Score?

You can apply for a loan or credit card and look at the terms offered to get an idea of where your score stands. You can also access free services that provide limited information about your score or pay for services that will give you more detailed information. A free service that is widely used in Canada is the FREE Equifax® Credit Score and Report.

How Can I Improve My Credit Score?

  1. Monitor Payment History

Payment history is the most important factor in determining your credit score. Make sure you:

  • Always make your payments on time
  • If you can’t pay the full amount, at least make the minimum payment
  • Never skip a payment (even if you’re disputing the bill)
  • Contact the lender immediately if you think you’re going to have trouble paying your bill
  1. Use Credit Wisely

Don’t go over your credit limit! Borrowing more than your authorized amount on a credit card can lower your credit score, especially if done repeatedly. Try to use less than 35% of your total available credit. For example, if the limit on your credit card is $2,500, try not to borrow more than $875 at a time (35% of $2,500). The reason for this is that it signifies to potential lenders that you do not overextend on the credit that is available to you, and that you have the fiscal responsibility to pay back what you owe in a reasonable timeframe.

  1. Increase the Length of your Credit History

The longer you have a credit account open and are actively using it, the better it is for your score. If you have accounts that are new, your credit score may be lower. Have an account you don’t need anymore? Consider keeping it open and using it from time to time to keep it active; this will progressively help to improve your score. With that said, ensure there is not a fee if the account is open but not in use. 

  1. Limit the Number of Credit Applications and Credit Checks

When lenders (and others) ask a credit bureau for your credit report, it’s known as an inquiry, or credit check. Having too many credit checks can be a red flag for lenders. They may think you’re desperately seeking credit, or trying to spend more money than you actually have. 

Tips for limiting the number of credit inquiries:

  • Limit the times you apply for credit. This includes instances of applying for credit cards, car loans, lines of credit etc.
  • When looking for the right mortgage lender, ensure your inquiries are done within a two-week period—they will be combined and treated as a single credit check. 
  1. Use Different Types of Credit

Having only one type of credit can actually lower your overall credit score. Consider having a mix of different types of credit products such as:

  • Credit cards
  • Car loans
  • Lines of credit

However, although having multiple credit products can lead to a stronger overall credit score, make sure you don’t take on more than you can manage. Make your payments in a timely manner, even if it’s just the minimum payment. Otherwise, you could end up hurting your score—sometimes less is more, especially when it comes to credit!

BONUS: Hard Hits vs. Soft Hits—What’s the difference?

Hard hits are credit checks that appear in your credit report, and are a factor in determining your overall credit score. Anyone who views your credit report will see these inquiries. Examples of hard hits are:

  • Application for credit card
  • Some rental applications
  • Some employment applications

Soft Hits are credit checks that appear in your credit report, but only you can see them. These checks don’t affect your score at all. Examples of soft hits are:

  • Requesting your own credit report
  • Businesses asking for your credit report to update their records about an account you already have with them

Hopefully you now have a better understanding of what a credit score is, and more importantly, what factors or behaviours can impact your score. Thanks for reading, and as always, feel free to reach out at any time.