7 ways to improve your credit score (2024)

Boosting your credit score can feel like an uphill grind, but it doesn't have to be. Whether you're just starting a credit history or are rebuilding after your scores have taken a hit, it's important to get acquainted with some of the basic ways to improve them.

Get started on these 7 strategies to improve your credit now, and watch your score steadily climb.

The single best thing you can do for your credit score is pay your bills on time. That means making at least the minimum payment by the due date every month. Payments even a day or two late can negatively affect your credit score, so consider setting up pre-authorized debits or registering for electronic alerts on your accounts to remind you when bills are due.

2. Limit your credit usage rate

Even if you pay all your bills in full and on time each month, your credit score can suffer if you use too much of your available credit. This can be a red flag to creditors that you're overleveraged. Lenders prefer you borrow no more than 35% of your total credit at any given time. For example, if the limits on all your credit products total $10,000, you could borrow up to $3,500 ($10,000 x 35%). Note that you can actually improve your credit score by accepting an offer to raise your credit limit, so long as you keep your borrowing amount the same. Doing this will lower your credit usage rate.

3. Choose the right repayment plan

If you've borrowed too much of your available credit, paying off some of your debt can improve your credit score. Two popular approaches to debt repayment are the avalanche and snowball methods.

With the avalanche technique, you make the minimum payments on all your debts, then put any extra money towards the debt with the highest interest rate. This will help you pay less interest overall. With the snowball method, you pay off your debts one at a time, starting with the smallest balance to build momentum. You could also look into consolidating your debts into a single loan with a lower interest rate instead of paying each debt individually.

4. Keep old credit open

The length of your credit history is one factor that plays into your credit score since lenders like to see a long record of responsible borrowing. So, it can help your score to keep an old credit account open and active, even if you don't need it. Keep in mind that if you transfer a balance from one account to another, that's considered new credit.

5. Use a secured credit card

If you have a tough time getting approved for credit —perhaps you're new to Canada or had previous credit problems — a secured credit card can help you build, or re-build, a good credit history. A secured card is sort of like training wheels for your credit. It's impossible to default on your account because you must provide a security deposit in advance that can cover any missed payments. Of course, to maintain a good credit score, you want to avoid that scenario by always making your payments on time.

6. Manage your credit checks

There are two types of credit inquiries: “soft” and “hard”. Soft checks, including requests to view your own credit report, don’t affect your credit score. Too many hard checks – such as when you apply for credit, fill out a rental application, or apply for a job – can damage your score because lenders may worry you’re trying to live beyond your means. So, be mindful of hard checks and apply for credit only when you really need it. If you’re shopping around for a mortgage or car loan, try to get all the quotes within two weeks. The inquiries will then be treated as a single hard check for the purposes of your credit score.

7. Check your credit report

Negative information that hurts your credit score, such as late payments, can stay in your credit history for up to 6 years. So, it's important to review your credit report regularly to ensure it doesn't contain any errors. You can get a free copy of your report through Canada's credit bureaus, Equifax and TransUnion, or the CIBC Mobile Banking® App. If you do find any discrepancies, contact the relevant financial institution as soon as possible and ask them to correct the information.

Need additional advice?

If you're looking for some extra help, book a chat with one of our advisors. They can help you create a plan to get your credit score where you’d like it to be.

7 ways to improve your credit score (2024)

FAQs

What are the 7 ways you can boost your credit score? ›

7 ways to improve your credit score
  • Set alerts to stay on top of your bills. The single best thing you can do for your credit score is pay your bills on time. ...
  • Limit your credit usage rate. ...
  • Choose the right repayment plan. ...
  • Keep old credit open. ...
  • Use a secured credit card. ...
  • Manage your credit checks. ...
  • Check your credit report.

How to build credit fast 7 simple strategies? ›

However, you can boost your credit score with the major credit agencies by using the seven tips below.
  1. Read Your Credit Report. ...
  2. Pay Your Bills on Time. ...
  3. Set Up Payment Plans With Creditors. ...
  4. Limit Applying for New Credit. ...
  5. Consider Keeping Old Accounts. ...
  6. Keep Credit Utilization Low. ...
  7. Use Different Types of Credit.

What are five 5 tips for improving your credit score? ›

Here are five credit-boosting tips.
  • Pay your bills on time. Why it matters. Your payment history makes up the largest part—35 percent—of your credit score. ...
  • Keep your balances low. Why it matters. ...
  • Don't close old accounts. Why it matters. ...
  • Have a mix of loans. Why it matters. ...
  • Think before taking on new credit. Why it matters.

What is the quickest way to raise my credit score? ›

4 tips to boost your credit score fast
  1. Pay down your revolving credit balances. If you have the funds to pay more than your minimum payment each month, you should do so. ...
  2. Increase your credit limit. ...
  3. Check your credit report for errors. ...
  4. Ask to have negative entries that are paid off removed from your credit report.

How to raise credit score 20 points fast? ›

  1. Pay credit card balances strategically.
  2. Ask for higher credit limits.
  3. Become an authorized user.
  4. Pay bills on time.
  5. Dispute credit report errors.
  6. Deal with collections accounts.
  7. Use a secured credit card.
  8. Get credit for rent and utility payments.
Mar 26, 2024

What increases credit score most? ›

One of the best things you can do to improve your credit score is to pay your debts on time and in full whenever possible. Payment history makes up a significant chunk of your credit score, so it's important to avoid late payments.

How do I build credit ASAP? ›

9 ways to build credit fast
  1. Understand the concept of credit. ...
  2. Check and monitor your credit. ...
  3. Dispute credit report errors. ...
  4. Open a credit card account. ...
  5. Take out a credit-builder loan. ...
  6. Become an authorized user. ...
  7. Request a credit limit increase. ...
  8. Keep a mix of different account types.
Apr 11, 2024

How to raise your credit score overnight? ›

How to Raise Your Credit Score 100 Points Overnight
  1. Become an Authorized User. This strategy can be especially effective if that individual has a credit account in good standing. ...
  2. Request Your Free Annual Credit Report and Dispute Errors. ...
  3. Pay All Bills on Time. ...
  4. Lower Your Credit Utilization Ratio.

What habit lowers your credit score? ›

Making a Late Payment

Every late payment shows up on your credit score and having a history of late payments combined with closed accounts will negatively impact your credit for quite some time. All you have to do to break this habit is make your payments on time.

What are the 5 C's of good credit? ›

The five Cs of credit are important because lenders use these factors to determine whether to approve you for a financial product. Lenders also use these five Cs—character, capacity, capital, collateral, and conditions—to set your loan rates and loan terms.

What are the 5 C's of credit score? ›

Character, capacity, capital, collateral and conditions are the 5 C's of credit. Lenders may look at the 5 C's when considering credit applications. Understanding the 5 C's could help you boost your creditworthiness, making it easier to qualify for the credit you apply for.

How to fix a bad credit score? ›

8 steps for fixing your credit score
  1. Check your credit report and score. ...
  2. Dispute any errors. ...
  3. Get bill payments under control. ...
  4. Set a goal for less than a 30% credit utilization ratio. ...
  5. Limit new credit inquiries. ...
  6. Avoid closing old credit cards. ...
  7. Consider a balance transfer card. ...
  8. Apply for a secured credit card.
Jan 26, 2024

Should I pay off my credit card in full or leave a small balance? ›

It's a good idea to pay off your credit card balance in full whenever you're able. Carrying a monthly credit card balance can cost you in interest and increase your credit utilization rate, which is one factor used to calculate your credit scores.

How do I fix my credit myself? ›

Here are 11 steps you can take on your own to steer your credit in the right direction.
  1. Check Your Credit Report. ...
  2. Dispute Credit Report Errors. ...
  3. Bring Past-Due Accounts Current. ...
  4. Set Up Autopay. ...
  5. Maintain a Low Credit Utilization Rate. ...
  6. Pay Off Debt. ...
  7. Avoid Applying for New Credit. ...
  8. Keep Unused Credit Accounts Open.
Apr 22, 2023

How to raise credit score 50 points in 30 days? ›

There are several ways to raise your credit score in 30 days. Reducing your credit utilization is one of the fastest ways to raise your credit score, and you can do it by paying down debt, spending less, paying your bill more often or asking for a higher spending limit.

How to raise your credit score 200 points in 30 days? ›

How to Raise your Credit Score by 200 Points in 30 Days?
  1. Be a Responsible Payer. ...
  2. Limit your Loan and Credit Card Applications. ...
  3. Lower your Credit Utilisation Rate. ...
  4. Raise Dispute for Inaccuracies in your Credit Report. ...
  5. Do not Close Old Accounts.
Aug 1, 2022

How to increase credit score by 100 points in 30 days? ›

Steps you can take to raise your credit score quickly include:
  1. Lower your credit utilization rate.
  2. Ask for late payment forgiveness.
  3. Dispute inaccurate information on your credit reports.
  4. Add utility and phone payments to your credit report.
  5. Check and understand your credit score.
  6. The bottom line about building credit fast.

How can I raise my credit score 100 points overnight? ›

10 Ways to Boost Your Credit Score
  1. Review Your Credit Report. ...
  2. Pay Your Bills on Time. ...
  3. Ask for Late Payment Forgiveness. ...
  4. Keep Credit Card Balances Low. ...
  5. Keep Old Credit Cards Active. ...
  6. Become an Authorized User. ...
  7. Consider a Credit Builder Loan. ...
  8. Take Out a Secured Credit Card.

How do I raise my credit score 40 points fast? ›

Here are six ways to quickly raise your credit score by 40 points:
  1. Check for errors on your credit report. ...
  2. Remove a late payment. ...
  3. Reduce your credit card debt. ...
  4. Become an authorized user on someone else's account. ...
  5. Pay twice a month. ...
  6. Build credit with a credit card.
Feb 26, 2024

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