How to Improve Your Credit Score?

Is your credit score low or has it fallen recently? Don't panic! It is perfectly possible to bring it back up gradually.

Here are the best strategies for rebuilding your credit score in Quebec.

How can I improve my credit score?

1. Establish a solid budget before starting from scratch

Before taking out a new loan or using credit, take the time to draw up a full budget. Identify the causes of your past difficulties and adjust your habits to avoid falling back into over-indebtedness. A clear budget is the basis for sound financial management.

2. Always pay your balances in full

To improve your credit score, don't limit yourself to minimum payments on your cards. Always aim to pay the balance in full before the due date. This demonstrates good financial discipline and reduces the risk of accumulating costly interest.

3. Keep to your payment dates

Even small delays have a negative impact on your score. Pay your bills, loans and credit cards before the deadline. Use reminders or automatic payments to never forget a due date, regularity is the key to a good score.

4. Resume credit gradually and strategically

After a consumer proposal or a bankruptcy, it's beneficial to start borrowing again, but carefully.

Start with :

• a credit card with secured deposit, or

• a small short-term loan (less than three years).
  These products demonstrate to lenders that you are once again able to manage your commitments.

5. Use a small portion of your available credit

Try not to exceed 30 to 35% of your total credit limit. For example, if your card offers a $1,000 limit, keep your balance under $300. This shows that you know how to manage credit without relying entirely on it.

6. Keep your oldest accounts

A long credit history is a sign of stability. If you don't have to close an old account, keep it open, especially if it's your first credit card. An account that has been active and well managed for a long time improves your profile in the eyes of lenders.

7. Check your credit report regularly

Request a copy of your credit report from Equifax or TransUnion at least once a year. You can do this free of charge by post. Make sure it contains no errors or out-of-date information, as these discrepancies can affect your credit score.

8. Limit the number of credit cards

Having several cards increases the risk of over-indebtedness. As far as possible, stick to a single card, ideally the one you've held the longest. This simplifies the management of your payments and strengthens your positive credit history.

9. Vary your types of credit responsibly

Lenders appreciate a variety of well-managed credit products: car loans, credit cards, lines of credit and mortgages. This variety shows that you are capable of managing different commitments, as long as you respect your deadlines and limits.

10. Demonstrate your financial and personal stability

Lenders value stability of employment and residence. If possible, avoid frequent changes of address or employment. A stable profile inspires confidence and helps to improve your credit score in the long term.

Get help to rebuild your credit score

Improving your credit score takes time, discipline and a good strategy. But you don't have to do it alone.

Our licensed insolvency trustee work with you to analyse your situation, structure a recovery plan and restore a healthy credit score. Using a humane, confidential approach tailored to your reality, we help you regain control of your finances and regain the confidence of lenders.

Book an appointment today for a free consultation and start building up your credit score now, step by step.