As life continues to return to “normal”, whatever this new normal looks like, we are seeing an increase in people asking about improving their credit score. Your credit score may have been impacted throughout the pandemic for a variety of reasons, but let’s focus on moving forward and improving it.

Here are 5 ways to improve your credit score:

  1. Payments
    Making your payments on time is the most important factor that impacts your credit score. It’s important to make at least the minimum payment on time every month.

    Tip: Contact your lender right away if you know you’re going to be late on a payment as there may be options available to you such as a payment deferral.

  2. Credit Utilization
    Credit utilization is the percentage of your total credit that you’re using. Having a high credit utilization will have a negative impact on your credit score. For example, if you have a credit card with a limit of $5,000 and you owe $5,000, you have a high credit utilization of 100%. As a general rule, try to use less than 35% of your available credit, and never go over your credit limit.

  3. Credit Age
    Another factor that affects your credit score is the length of time since you first opened a particular credit account. Generally, the longer your credit history, the better, as this shows your experience with credit and your ability to repay debt.

    Tip: Try to keep credit cards and/or lines of credit open, even if you no longer using them, to maximize the length of your credit history.
  4. Check Your Credit Report
    It’s a good idea to check your credit report on a regular basis to make sure it’s accurate. Not only that, it’s good to monitor to watch out for credit fraud or identity theft. There are two main credit bureaus in Canada- Equifax and Transunion. You can check your credit report through these companies for a fee. There are also companies that offer these services for free, such as Credit Karma. Checking your credit this way is considered a ‘soft hit’, which means it won’t impact your credit score.

  5. Don’t Always Apply for Credit
    Every time you apply for credit, a credit check is done on your credit report. Did you know that having too many inquiries on your credit bureau can hurt your credit score? Typically, every time a creditor pulls your credit bureau, your score may go down a few points. However, if there are multiple creditors checking your credit bureau at the same time, this is seen as a red flag for most lenders and will negatively impact your score. Try to apply for credit strategically and don’t apply for multiple loans/credit cards at the same time.

There’s no one size fits all solution when it comes to improving your credit. Reach out to a financial advisor who can review your options and give you personalized advice and guidance.


Not financial advice. For entertainment purposes only.

Reach out to one of our Truly Local Financial Advisors today:

Book a meeting →

Sarah Bujacz

Written by Sarah Bujacz

Sarah is a Financial Advisor at our PenFinancial Welland branch.