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How to Increase Your Credit Score by Reviewing Your History

Understanding your personal credit score can help you understand your financial weaknesses and allow you to correct them over time. Unfortunately, only four in 10 Canadians monitor their credit score and even fewer know how it’s calculated, according to a Capital One survey.

The good news is that knowledge is power, and knowing a little more about how your credit score works can help you improve it.

What are the benefits to reviewing my credit history?

First, you should understand how your credit score is calculated. Five main categories determine your score through a ranking system.

  • Past payment history makes up 35 per cent
  • Overall debt load is 30 per cent
  • Credit history, 15 per cent
  • New credit applications, 10 per cent
  • Types of credit, 10 per cent

By reviewing your credit report, you’ll be able to spot problematic areas and make room for improvement. Additionally, monitoring your credit score on a semi-regular basis will allow you to act quickly in the chance of fraudulent activity or identity theft.

Where can I access my credit report?

You can use a credit monitoring tool. Your bank may offer this service, or you can choose a credit monitoring service like Borrowell or Credit Karma. Or, to access your credit reports for free, once per year, contact TransUnion or Equifax, Canada’s two credit reporting agencies.

How can I increase my score?

Paying your bills on time and in full each month will keep your payment history in the best standing. It is equally important to keep your debt at a manageable level and to only utilize 30 per cent or less of your credit availability. This means regularly carrying a very low debt balance or even better, paying off each balance monthly. To see your credit utilization ratio, use this handy tool as a guide.

Once you’ve reviewed your credit report, you can work on areas that need attention. Remember that it will take time for these positive habits to reflect in your score. There are no quick fixes when it comes to changing your credit, but consistent healthy financial habits will help you get there.

Want to know more about how to review your credit score? Tune into our podcast to hear LITs from across Canada offer their best advice. For more quick tips, connect with us on Twitter, using the hashtags #CreditScore #CreditControl



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