10 Tips on How to Increase Your Credit Score Efficiently

Written By
Julija A.
July 11,2023

A poor credit score can limit your chances of being approved for a loan, so you should always aim to maintain a good score. However, if you’ve found yourself stuck with a bad credit score, fear not, as there are efficient ways to improve it.

Best Ways to Increase Your Credit Score

Learning how to increase credit score quickly may seem challenging, but we’ve outlined ten easy ways to help you in this endeavour. 

Request a Credit Report

The first thing you should do when aiming to raise your credit score is to obtain your credit report. This will give you insight into your credit history, so you’ll have a better idea of what caused the poor score in the first place.

You can get a free credit report through one of the two main Canadian credit bureaus, Equifax and TransUnion.

Once you have the report, you can take notes on what got you there. The most common reasons for a poor credit score include late payments, maxing out credit cards, or having no credit history.

Late payments affect your credit score to a great extent. What is more, they stay on the credit report for seven years. While being a few days late isn’t likely to do any damage, 30 days or more is another story. The later the payment, the greater the impact. You should therefore make sure that you pay off all your debts on time. 

Check for Errors in Your Credit Report

Having acquired your credit report, go through it meticulously and check for any errors. As these mistakes happen more often than you might think, they might go unnoticed. If you spot any inaccuracies, make sure to report them immediately, as they could be dragging down your score.

Acquire a Secured Credit Card

A secured credit card is intended specifically for people with bad credit scores. What separates this card from an unsecured credit card is that it requires a deposit, which is used as collateral for the credit limit. 

This card can help you boost your credit score in less than six months. However, keep in mind that for that to happen, you need to use the card responsibly. This includes making timely payments and keeping your balance low. The recommended credit utilization is below 30% of the available credit limit. 

Become an Authorized User

You may not be able to get a credit card of your own due to a poor credit score, and a secured credit card may not be an option for you if you can’t afford to pay the deposit. In that case, you can become an authorized user.

If you have a family member or a close friend with a good credit score, you can ask them to add you as an authorized user on their credit card account. You will then receive your own card with the same credit limit as the primary account holder. 

Becoming an authorized user gives you the chance to demonstrate that you can make timely payments and use the credit card responsibly. In turn, this will impact your credit score positively. The method works best if the person authorizing you has a good track record of making timely payments and has a high credit limit.

Use a Credit Builder Loan

A credit builder loan is a type of loan that people with no credit score or a poor one can obtain. Although it’s more useful for people with no credit history to build their credit score, it can help those with poor credit as well.

Credit builder loans are offered by some financial institutions, including credit unions and community banks. Moreover, some online lenders offer this type of loan.

This loan works differently than a typical loan, as you don’t get the money upfront. Instead, you agree on the amount you’d like to borrow and then make monthly payments, including interest. The money is then made available to you after you’ve paid off the loan in full.

The method is useful if you don’t require a loan instantly but would like to increase your credit score to be able to get low interest loans in the future.  

Keep Track of Your Spending

If you want to improve your credit score, you must be aware of your spending patterns. By tracking your expenses, you’ll be able to make adjustments that might enable you to save up and pay off your debts. 

There are a number of ways you can keep track of your spending. For starters, you can create expense categories. This will provide clear insights into where your money is going. Downloading a budgeting app can be a viable option as well, but the simple pen and paper method works too. 

In case you own a business, it’s advisable to have a business account and card to track your business expenses. By keeping your personal and business expenses separate, you’ll be able to stay on top of your finances.

Ultimately, whichever method you choose, make sure it’s one that works for you and that you’ll be able to stick to, as being consistent is key.

Increase Your Credit Limit

Another way to boost your credit score is by increasing your credit limit. If you have a good payment history, you can ask your credit card issuer to raise your limit. Owing to this, you’ll have more available credit, which will, subsequently lower your credit utilization ratio.

A lower credit utilization ratio is good for your credit score since it shows that you’re not maxing out your credit limit. Needless to say, this method only works if you can control your spending. Additionally, you should keep your credit utilization below 30%. So, if your credit limit is $1,000, for example, you shouldn’t utilize more than $300.

Initially, raising the credit limit will probably hurt your credit score. That’s because the issuer will probably perform a hard credit check to see whether you’re eligible for a credit limit increase. Although a hard inquiry can stay on your credit report for years, your credit score will only be affected for a few months to a year. 

Keep Your Old Accounts Open

One of the factors that lenders look at when approving a loan is the length of your credit history. That’s why, when looking at how to improve your credit score, even if you are currently not using a particular credit card, it’s still beneficial to keep the account open. Owing to this strategy, you’ll show lenders that you have a long history of managing debt responsibly.

Pay Off Collections Accounts

In case a debt hasn’t been paid off within the course of more than 150 days, it’s sold to a debt collection agency. However, at this point, paying off the debt won’t make the damage to your credit score go away. 

Still, it’s possible to file a dispute with the credit reporting agencies to have the debt history removed from the credit report once you pay it off in full. The credit reporting agencies will then verify with the debt collector whether you have indeed settled all your payments. 

This is not a foolproof method, but it’s worth trying. What is more, paying off your debt means you’re not at risk of being sued. 

Refrain From Opening Too Many Accounts

In our article on how to increase your credit score, we mentioned getting a secured credit card or acquiring a credit builder loan. Keep in mind, though, that it’s not prudent to open too many accounts at once.

First of all, each time you open an account, there may be a hard inquiry. While one hard check hurts your credit score only slightly, having multiple ones in a short time can have a more severe impact.

In addition, having many new accounts lowers the average period you’ve had all of your accounts. This can also damage your credit score.

Moreover, having to juggle several accounts may be more than you can handle financially. Therefore, if you’re planning to open a new account, make sure it’s only for something you really need and can afford.

Wrapping Up

Now that you know how to improve credit score in Canada, you can start implementing some of the techniques immediately. However, bear in mind that improving your credit score takes time and effort. It will be worth it in the long run, though, as a good credit score can save you money on interest rates and make it easier to get approved for loans.


What is the fastest way to raise a credit score?


There are quite a few ways to build your credit score fast. The first thing to do is review your credit report and check for potential errors. If you find them, you should notify the credit reporting company straight away. Other approaches include getting a secured credit card, becoming an authorized user of someone else’s credit card, and increasing your credit limit.

What affects a credit score?


If you’re wondering how to increase your credit score in Canada, first you should find out what affects your credit score. There are several factors, including payment history, the number of credit accounts owned, and the length of time you’ve had the accounts.

How can I immediately boost my credit score?


Many people would like to know how to increase their credit score as soon as possible. Regrettably, there is no instant solution, as it can take at least six months for any significant changes to occur.

About author

Albert Einstein is said to have identified compound interest as mankind’s greatest invention. That story’s probably apocryphal, but it conveys a deep truth about the power of fiscal policy to change the world along with our daily lives. Civilization became possible only when Sumerians of the Bronze Age invented money. Today, economic issues influence every aspect of daily life. My job at Fortunly is an opportunity to analyze government policies and banking practices, sharing the results of my research in articles that can help you make better, smarter decisions for yourself and your family.

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