How to Raise Your Credit Score by 100 Points in Canada

Do you need to raise your credit score by 100 points or more? Sometimes life throws you a curveball (or two) that hurts your credit score. Overall, that makes it harder to access more than just the financial solutions you need. In Canada, your credit score plays a key role in all of your major financial decisions. Whether you want to buy your first home, rent an apartment, or apply for that dream job, your credit score speaks to how you handle money.

If you have a low or bad credit score and seek ways to raise it by 100 points, this article is for you. There is no magic bullet that will quickly raise your credit score, especially a bad credit score. However, these 10 tips can increase your credit score a 100 points or more over time.

Key component of your score
They age like fine wine
Utilization over 30% lowers your score
Errors will cost you a lot
Fastest way to restore a higher score
Stay on top of your budget
Multiple credit checks lower your score
Variety improves your score
Keep your utilization ratio under control
Might help you manage your money

1. Pay your bills early

Payment history accounts for 35% of your credit score. Do you often miss your credit payments? How do you feel when you remember you missed a scheduled payment, and it affects your credit score? Terrible, right?

Luckily, there are measures you can put in place to ensure you always pay your bills on time.  You can set up an autopay from your bank or credit card company or install a mobile app that helps keep track of your bills.

If you have any outstanding bills right now, you should pay them off first before the new bills. You can also set a reminder using your digital calendar to ensure early payment of bills.

To raise your credit score by 100 points, paying your bills on time is critical because it prevents your credit score from decreasing, especially if you struggle with making payments before the due date.

2. Keep unused credit cards open

To raise your credit score by 100 points, do not be quick to close old or unused credit accounts. Keep your credit cards open even if you don’t use them, and leave the records of fully-paid old debts on your credit report. A longer credit history raises your credit score over time because credit scoring models value long-standing credit relationships.

That’s because the length of your credit history accounts for a portion of your credit score. Closing an older account shortens the average length of your credit history, which can lower your score, especially if the account was in good standing. Credit scoring models value long-standing credit relationships.

However, try to have some transaction activity on your old credit card, even if you rarely use the card. Providers may close your card due to inactivity. To avoid this, you can gradually lengthen your credit history by setting up automatic payments for lower expenses such as your monthly subscriptions, like Netflix or Amazon Prime, for example.

3. Do not max out your credit cards & lines of credit

Keeping the balances low on credit cards and lines of credit is an easy way to raise your credit 100 points over time. That’s because it improves something called your credit utilization ratio, which makes up a significant portion of your credit score.

The credit utilization ratio is the percentage of your available credit that you’re currently using. It’s calculated by dividing your total credit card balances by your total credit card limits. The lower your credit utilization ratio, the better it is for your credit score. A lower utilization ratio shows lenders that you’re not heavily reliant on credit and that you can manage your debt effectively.

If you have a certain amount as your credit limit, try as much as possible to spend less, and reduce your credit utilization ratio. Most creditors will look closely at the available credit on your cards and how much you currently owe. It’s best to spend less than 30% of your available credit

For example, if you have $2000 as your credit card limit, try to keep the balance below $600 and pay more than the minimum payment amount. Ideally, you want to pay off your credit card balance in full every month. That way you get the benefit of positive payment history while never going over the credit utilization threshold, and the bonus of never paying interest charges.

4. Review your credit report regularly

Errors in your credit report can pull down your credit score. Regularly checking your credit score and reviewing your credit report can potentially raise your credit score 100 points over time because it allows you to spot and fix issues like incorrect late payment records, duplicate accounts, or identity theft issues, which you can dispute with the credit bureaus.

It also helps to review other factors in your credit report that reduce your credit score and find ways to improve them. Companies like Borrowell and ClearScore allow you to check your credit score for free as many times as you want.

5. Dispute any inaccuracies on your credit reports

So you reviewed your credit report and found a mistake. Now what? The law requires credit reporting agencies to correct any legitimate mistakes that are found inside your report. But it is your responsibility to inform the agency.

Equifax’s credit dispute process is fairly straightforward to follow. You will need to provide comprehensive details about the error. It is unlikely that both credit reporting agencies would have identical errors. For TransUnion, there is a section of its website dedicated to disputing errors in your credit report.

Documenting all of your interactions with the respective credit reporting agencies is necessary. The majority of the time, everything goes smoothly, but it helps to have a communication paper trail in case there are any misunderstandings. You should begin this dispute process as soon as possible; it could take 30 days or longer before the corrections are implemented and another month after that for your credit score to adjust.

6. Pay your debts in full

Write out how much you’re owing and draft a payment plan for each credit account.  There are various strategies to help pay off your debts, such as the snowball and avalanche methods. Use the Hardbacon Debt Repayment Calculator to run different scenarios and find the best strategy for your situation.

You can start by paying off small debts, excluding mortgages, by using the debt snowball method. The debt avalanche payment method also helps pay off debt with the highest interest rate first. Avoid bad debts like accounts sent to collection agencies because it lowers your credit score and stays on your report for up to 7 years.

7. Don’t apply for new credit unless you actually need it

Resist applying for new credit unless you absolutely need it. Each time you apply for credit, a hard credit check, called an inquiry, is recorded on your credit report. These inquiries can temporarily reduce your credit score by a few points. A lot of hard credit checks in a short period of time can significantly reduce your score.

Opening new accounts can also lower the average age of your credit accounts. If you do not apply for new credit, you maintain the length of your credit history, which can help raise your score. Constant applications for credit raises a red flag for lenders because they see it as risky behaviour. Before you apply for a new card, make sure it’s necessary and, if possible, avoid debt.

8. Use a mix of credit accounts

Having different kinds of credit accounts shows lenders that you can handle different kinds of financial obligations. Different types of credit include things like credit cards, retail accounts, installment loans, mortgages, etc. For example, you should aim for a mix of credit accounts on your credit report like a car loan, mortgage, and a line of credit.

Generally, lenders like to see different types of credit on your report before issuing you new credit. However, do not apply for a loan just for the sake of mixing up your credit because hard credit checks can impact your score.

9. Increase your credit limit

The credit limit is the maximum amount you can spend with your credit card or line of credit. You can ask your credit card company or lender to increase your credit limit. But this only works if you can control your spending and not charge up a balance.

Increasing your credit limit can help increase your credit score by affecting a significant factor in credit scoring calculations: your credit utilization ratio. If you increase your credit limit but don’t increase your balance, you’ll lower your credit utilization ratio, which positively impacts your credit score.

Although raising your credit card limit increases your score, you must however be careful not to spend more than your available limit. For instance, if you ask for a raise in your credit card limit from $3000 to $5000, try to keep your balance below $1500.

10. Consider getting a secured credit card

If you are just starting to build your credit score, one of the fastest ways to raise your credit score is to get a secured credit card. A secured credit card requires you to make an upfront payment which serves as your credit limit. For example, if you make an upfront payment of $250 to your credit card company to get a secured card, your credit limit will also be $250, and you are allowed to spend the upfront payment.

One of the best secured credit cards in Canada is the Neo Secured Card by Neo Financial. Approval is guaranteed and it has the lowest security deposit requirement we’ve come across at just $50. Neo also offers one of the best cash back programs too. You can earn an average of 5% cash back, and up to 15% for each first purchase at a Neo partner retailer

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When use this secured card responsibly, every payment you make gradually increases your credit score – making it one of the best credit cards to rebuild your credit in Canada. If you are finding it difficult to get approved for an unsecured card, you can start up with a secured card, build your payment history and apply for an unsecured card after a while.

How long will it take to raise your credit score by 100 points?

Raising your credit score is a gradual process and the time it takes can vary significantly based on individual circumstances, such as your current credit score, your credit history, and your financial habits.

For example, if your credit score is because of major negative items like a bankruptcy, consumer proposal, or loans and bills sent to collection agencies, it can take a few years to raise your credit score 100 points or more. That’s because these items remain on your credit report for several years and continue to impact your score during that time.

On the other hand, if your score is low because you have high balances owing on your credit cards and lines of credit, or you missed payments, you could raise your credit score by 100 points a lot faster. Making regular, on-time payments, paying down your debt, and keeping your credit card balances low is something you can start doing right away that can have an immediate impact on your credit. If you’re consistent with these good habits, it’s possible to raise your credit score 100 points within a few months to a year.

More credit-building tools to help raise your credit score 100 points

We touched on some of the ways you can raise your credit score, but you don’t have to do it all on your own. There are a few companies that have some remarkable credit-rebuilding tools. We are going to review each of them in no particular order. They are all worth serious consideration if you’re looking to raise your credit score 100 points or more.

KOHO’s credit-building subscription

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KOHO offers a prepaid Mastercard and an app that can help you keep tabs on your finances. Budgeting is very important when trying to raise your credit score. If you do not have a good budget in place, you could end up spending more than you can afford. You can load your KOHO Prepaid Mastercard with a specific spending limit to keep you on track. Further, you can use the app the tracking spending and create a personalized budget in various expense categories.

If you trying to raise your credit score by 100 points, the KOHO credit-building subscription can help. Every month you will pay KOHO up to $10 for 6 months. KOHO opens a line of credit tradeline on your credit file. KOHO then reports your monthly payments to both TransUnion and Equifax. This credit-building tool helps raise your credit score for two reasons.

  • It adds a new tradeline to your mix of credit products. Having a mix of revolving and fixed credit products is highly recommended
  • It provides a positive repayment history, which dramatically impacts your credit score.

Borrowell Credit Builder

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Borrowell is well-know for giving you access to your credit score for free. But the company has more to offer. Credit Builder is a secured loan, but it works a little differently than other loans you’re used to.

This unique credit rebuilding loan doesn’t give you any money upfront. Instead, your payments are saved and held until the end of the term. It works more like a savings account that also helps you raise your credit score. Every month you would make payments for a predetermined amount, and at the end of the term, you get the total of your payments back less fees.

Benefits of using credit repair companies

Most of us are not familiar with the inner workings of Equifax and TransUnion and the laws that govern them. However, a little-known secret to raising your credit score is to seek out the help of professional credit repair consultants. Yes, not an app, but a person.

These individuals are fully versed in the laws that these credit reporting agencies must abide by. With your permission, the credit repair consultants contact the credit reporting agency and have the incorrect information removed as soon as possible.

These experts go through your report with a fine-tooth comb and come up with a plan to improve your credit score. Remember, these credit repair professionals have worked on thousands of accounts and have documented success.

Think about this situation: you are shopping for a mortgage but also have errors on your credit report that are hurting your score. If you are in a situation where you need to see quick results, like needing to raise your credit score 100 points, these experts can really save the day. It may be worth the money to hire help.

However, when using a credit repair consultant, you must provide them with full transparency. Things that seem trivial to you can impact the outcome of your credit-rebuilding goals. Be honest about everything.

Putting it all together

If you’re looking for ways to increase your credit score for good, then the above-mentioned points in this article will help you achieve that. If your credit score is low, don’t give up.

Pay your debts on time, try not to miss a payment, and review your credit report regularly. If you discipline yourself to have a healthy credit score, chances are, it will keep increasing by 100 points or more.

Maude Gauthier is a journalist for Hardbacon. Since completing her Ph.D. in communications at University of Montreal, she has been writing about finance, insurance and credit cards for companies like Fonds FMOQ and Code F. As a responsible user of credit cards, she can spend hours reading the fine print to fully understand their benefits. Because of their simplicity, she developed a preference for cash back cards. After suffering steep increases with her former insurer, she can now proudly say that she saved hundreds of dollars by shopping around for her auto and home insurance. In her free time, she reads novels and enjoys streaming popular shows (and possibly less popular shows, like animal documentaries).