Have you ever wondered how your credit score is calculated? What causes your score to go up or go down? Most Canadians have no clue. Over the years, I have seen hundreds of credit reports and put together a list of 7 tips to improve your credit score.


Simply put, your credit report details your history of borrowing and repaying loans. It will show things like cell phone bills, credit cards, student loans, auto loans or leases, mortgages, and lines of credit. It outlines any late or missed payments and how much credit you utilize.

credit scores

During your mortgage application, the lender will analyze your credit report to determine how responsible you are with your repayments. Having a good credit score gives you options. If your credit score is low, it can impede your mortgage approval.


1. Have At Least 2 Active Credit Lines Open

You need to have at least 2 open tradelines that you make regular payments to. Ideally, they’ve been open for more than 12 months and the limits are over $2000. Tradelines could be anything from credit cards, auto loans or lines of credit. You want to show that you can manage credit responsibly.

2. Always Make Payments On Time

Skipping payments is a no-no. You should ALWAYS make the minimum payment but paying the full balance every month is much better.

3. Keep Balances Below 50% Of Available Credit

This is one of the toughest goals to achieve. Keeping a balance over 50% utilized isn’t good for your credit score. If you have a credit card with a $10,000 limit, always keep the balance below $5,000 if possible. Best practice, always pay it off in full.

4. Limit Credit Enquiries

Having your credit pulled multiple times can decrease your score. That’s one of the great things about working with a Mortgage Broker. We use one credit report and shop multiple lenders. If you went to 5 different banks for quotes, they’d all need to pull your credit report. One or two inquiries in a month is okay but no more than that.

5. Keep Missed or Late Payments to 1 Month

If you’re late or miss a payment, don’t fret. The best thing to do is get back on track immediately. One missed payment looks like an anomaly but consecutive months looks like a pattern.

6. Make Sure Each Partner Has Their Own Credit

Having all your credit cards and loans under one spouse’s name can create headaches. Essentially, this leaves one person with no history of managing credit. I advise everyone to have their own credit in addition to joint accounts.

7. Do Not Exceed Your Credit Limit

Over extending your limits is disastrous for improving credit scores. Having overdrawn credit shows the lender you can’t manage your current debt loads.

Following these 7 tips should make your mortgage application run smoothly. If you need help building your credit, we offer an amazing tool, https://www.clevercredit.ca

Contact me anytime with any mortgage related questions.