The 8 Best Credit Improvement Tools For Canadians

Best credit Improvement tools

    Credit improvement isn’t only for people with bad credit. Unless you have a perfect score, it always helps to continuously increase your score. A higher credit score can impact everything from applying for a credit card to getting a mortgage and even renting an apartment.

    There are many credit improvement tools out there for Canadians that can build credit scores quickly. These aren’t credit repair companies that you have to pay, they’re tools that help increase your credit score, whether it be bad or good. We analyzed dozens of the best credit improvement tools, and rated the best ones below.

    1. Borrowell – Best Free App

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    Borrowell is the go-to credit score app in Canada, serving over a million people by providing free credit reports at the touch of a button. Currently, Borrowell offers Equifax credit reports based on a 300-900 credit score range.

    First, access your credit score for free with Borrowell. A score of 660 and above can be considered good. You can create an account in less than 3 minutes by answering a few identity verification questions. Once your account is activated, you can start receiving weekly updates on your credit score, track changes and what caused them, and get valuable insights about what’s impacting your score. 

    Borrowell will analyze your credit profile and make personalized recommendations for credit products and other banking services that you are most likely to qualify for. This helps protect your credit score from the negative impact of hard credit checks and rejected applications for products you don’t qualify for.  

    The company also offers a Credit Builder subscription starting at $10/month. It is a secured installment loan and you won’t receive any money upon approval. You will have to make payments for 36 months, but you’ll get your savings back at the end of the term. Payments are made automatically through a pre-authorized debit agreement, so you never have to worry about missing a payment, and they are reported to Equifax. Credit Builder is available in Canada, excluding Quebec, Saskatchewan, New Brunswick.

    2. KOHO – Best Credit Building Subscription

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    KOHO is a Toronto-based neobank that gives you the ability to access your funds, manage your finances, pay for expenses with a prepaid Mastercard and earn both cash back and interest on every dollar you spend and save. The company’s goal is to make managing money simpler, faster, and more transparent. Through its app users can get instant access to their accounts, transfer money, and monitor their spending through a variety of features that help them reach financial goals. 

    KOHO provides an innovative Credit Building subscription plan designed to boost your score without going into debt or applying for credit. For $10 a month, the KOHO Easy plan will open a tradeline on your credit file and report your monthly payment for 6 months. Alternatively, you can pay for the full 6 months upfront with a single lump sum payment. There are no credit checks, interest, penalties or late fees to worry about and you can cancel at any time.

    Credit Building is also available at $7/month with the Essential and Extra plans as well as $5/month with the Everything plan. After the first 6 months, you can renew your subscription if you are satisfied with the results.

    3. Chexy – Best Rent Reporting Tool

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    Chexy allows you to build credit on rent. How does it work? Basically, they will charge your rent to your credit card and will pay your landlord on your behalf.

    First, create an account. You will need to upload your lease. Then, connect your credit card or debit card, and let them do the work. Chexy will charge your card each month and e-transfer the money to your landlord. They make money by charging a 1.75% fee on credit cards payments, but paying via a bank account (EFT) is free! They also charge $9.99 per month to those who opt in to Credit Builder.

    Their website offers a calculator to help you estimate the rewards you could get. For example, if your rent is $1,500 per month and you are using the BMO CashBack Mastercard, which is free, you’ll get approximately 360$ in cash back over a year. But don’t forget to account for the Chexy fees! Premium cards, such as the Scotia Momentum Visa Infinite, will help you get higher rewards (in this case, $720).

    4. Neo Secured – Best Secured Credit Card

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    The Neo Secured Mastercard is a credit improvement tool designed to help Canadians establish or rebuild their credit history. Unlike traditional credit cards, there is no credit check and approval is guaranteed. There is a $50 minimum security deposit required, and your credit limit is equal to the amount of your security funds. Just like a traditional credit card, payments are reported to the credit bureaus. An interesting feature of this card is that your purchases can earn up to 15% cash back! It is much more than what most secured credit cards offer. 

    To get started with the Neo Secured Card, you need to fill out an application and submit a security deposit that will determine your credit limit. Once approved, you can start using the card to make purchases and build your credit history. If you are able to use the card responsibly and pay off your balance on time, you can gradually improve your credit score and qualify for other financial products in the future.

    5. Neo Credit – Best Traditional Credit Card

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    At Hardbacon, we think Neo Credit is the best credit card for 2024. Why is that? First, the card is free and Neo accepts a range of credit scores. If your score is 600 or above, you’ll likely get accepted. Its features are very similar to the Neo Secured card mentioned above.

    On average, you will earn 5% cash back at numerous partner stores, including Netflix, Decathlon and Clearly. The amount of cash back you can earn is unlimited, and you can use the Neo app to find deals as good as 25% cash back! Neo Financial also offers a bank account and if you deposit your cash back into this account, you’ll earn 3.75% of interest on it.

    6. Hardbacon – Best for Paying Down Credit Card Debt on Your Own

    Using the Hardbacon Debt Repayment Calculator is a great way to improve your credit score. Paying down credit card balances has a positive effect on your credit because it reduces your credit utilization ratio – meaning you are using less of your available credit than before. Additionally, making regular payments helps demonstrate commitment to creditors and shows them you’re reliable which improves your creditworthiness.

    The Hardbacon Debt Repayment Calculator is designed to help you pay down your debts using the Avalanche Method. The Debt Avalanche method is a debt repayment strategy designed to help borrowers efficiently pay off their debts with the highest interest charges. For example, credit cards can carry interest rates that range from 19% to 25%. The Debt Repayment Calculator helps you determine how much of your excess cash flow you can allocate towards paying down each credit card bill each month to help you get out of debt and save money on interest. 

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    7. Nyble – Best Small Loan with 0% Interest

    To open an account with Nyble, you don’t need pre-existing credit history or to put down a deposit. Nyble helps you monitor your credit score, in a way similar to Borrowell, but they also offer other services. Their feature called Nyble Cover allows you to get money (up to $150) to cover for unexpected bills without falling into debt. It could help you avoid a missed payment on your credit file. There is no credit pull, no interest and no late-fees, although there are membership fees. The entire amount you borrow must be paid back in full on your next payday. Once you qualify, you’ll always have access.

    Nyble also offers a credit building feature. Their Credit Builder runs for 4 months and costs $29.99 upfront. When you sign up, Nyble will open a tradeline on your Equifax credit file and report your payments. 

    8. Fairstone – Best Debt Consolidation Loan

    Fairstone has been landing to Canadian customers for almost 100 years with 240 branches across the country. They offer personal loans from $500 to $50,000. Their debt consolidation loans could help you combine multiple bills and get out of debt faster with one simple monthly payment. By making late or missed payments, you would incur additional interest charges. But by making on-time payments and reducing your debt, you’ll improve your credit score over time.

    You can start with a no-obligation loan quote to find out how much money you could qualify for. It won’t impact your credit score. If you’re interested, they will call you to finalize the loan application. If all goes well, you could receive the money directly into your bank account the same day.

    Conclusion: Methodology

    There are many different Canadian credit improvement tools out there, and various things you can do to increase your credit score. The solutions listed were selected after comparing dozens of different tools and companies. The main things we looked at were ease of use, user reviews, reputation and trust score, and low fees.

    FAQs on Credit Improvement

    How to improve your credit score?

    The most important action you can take to improve your credit score is to always pay your bills on time. Many other tips can help you increase your score.

    Does paying off collections improve a credit score?

    A debt in collections is one of the most serious negative items that can appear on credit reports. Paying a collection account off may increase your credit score, but there’s no guarantee since the item will remain on your credit file for a couple of years. The good news is that the impact on your credit score will diminish over time.

    How long does it take to improve a credit score?

    Most changes you make to improve your credit score will have a small impact, such as a 10 or 20 points increase. This means that the time needed to improve your score significantly depends on what it was at the beginning and what you’re aiming for. The tools listed in this article such as KOHO Credit Builder could help you get there faster.

    How to improve a credit score fast?

    If you find mistakes in your credit report and are able to get them corrected through an Equifax of TransUnion dispute, it could really help improve your score as soon as the wrong information is erased. Otherwise, you’ll have to turn to the tools listed in this article to improve your credit faster.

    How long after paying off credit cards does credit improve?

    Your credit can improve quite quickly after you’ve paid off your credit card debts. Creditors usually send information to the credit bureaus once a month, so you can expect the change to be reflected within a couple of weeks.

    Does adding a credit card improve your credit score?

    Getting a new credit card can improve your credit, or not! It really depends on your credit report as a whole. Adding a credit card will change your credit limit and if you don’t use it very much, it might help with your credit utilization ratio, for example. But how many cards do you already have? If you already have three credit cards or more, adding another one might harm your credit.

    How soon will my credit score improve after bankruptcy?

    Most people will see their credit score improve after one year if they take the right steps, but the bankruptcy will stay on your credit file for many years.

    Arthur Dubois is a personal finance writer at Hardbacon. Since relocating to Canada, he has successfully built his credit score from scratch and begun investing in the stock market. In addition to his work at Hardbacon, Arthur has contributed to Metro newspaper and several other publications