How to Improve a Credit Rating in Canada

Improving your credit score is a task you can start on immediately and see results no matter how dire your credit situation. Even in situations where a credit score is at the lowest possible score, you can mitigate the damage and begin to get ahead of the situation. Canadian law requires lenders and creditors to report to the credit agencies accurate and complete information. This law can help remove incorrect items from your credit report, which can improve your credit score. There are other steps you can take that also can help you begin to rebuild your credit situation.

Instructions

Paying your Bills

1

Pay your bills before the due date. If possible, pay the bill immediately upon receipt. Getting in this habit will allow some leeway should you run into any issue that throws you off schedule.

2

Send more than the minimum payment due. If possible, make a payment large enough to keep the balance between 1 and 20 percent of the credit limit. The lower your balance, the higher your credit score will be.

3

Find out the date your lender reports payments to the credit bureau and make sure your payment is received prior to that date. Your credit score is adjusted with each credit reporting and making a payment before this date will keep your balance reporting amount at its lowest.

Dispute Items on Your Credit Report

4

Order a copy of your credit report. Canadian law affords you the right to dispute any item on your credit report. Carefully review your credit report. Look for incorrect balances, incorrect dates, incorrect statutes or any other item not reported correctly. Circle any item in question.

5

Write a letter of dispute to the credit agency in question. Your credit report will list the address to mail your dispute. Your letter should include your name, Social Insurance Number, date of birth, and address. Include a copy of your driver's license and a utility bill. List each item in detail and give a reason for the dispute. Keep your reason simple and brief and ask that the item be removed from your credit report.

6

Mail the letter with a delivery confirmation and allow 30 days for the credit agency to investigate the dispute. If a lender fails to verify the item in question, the credit agency will delete the account from your credit report. Each negative item that is successfully removed from your credit report should result in an increase in your credit score.

7

Review any documentation sent back to you from the credit agency. You may dispute the item again if you are sure an error has been made and was not corrected. Include any additional information you may have that will support your stance.

Add Positive Credit

8

Review your credit situation. You should have a minimum of three positive credit accounts reporting monthly. A mixture of revolving credit and installment credit is best.

9

Evaluate your credit score and the requirements for qualifying for a credit card if you have less than three revolving credit accounts. If you are unable to qualify for a credit card due to your credit score, open a secured credit card.

10

Make your payments on time and keep your balance on the account between 1 and 20 percent of the credit limit. Allow six months to pass and review your credit score to see the increase.