If you’re planning to buy a house, get a loan or open a new credit card, you’ll need to know about your credit score. Your credit score is a number that represents your creditworthiness, and lenders use it to decide whether to approve your application and what interest rate to charge you.

In Canada, the two major credit bureaus are Equifax and TransUnion, and they calculate your credit score based on factors such as your payment history, credit utilization, length of credit history, types of credit, and recent credit inquiries. Your credit score ranges from 300 to 900, and a higher score means better creditworthiness.

So, how can you improve your credit score? Here are some tips to consider:

  1. Check your credit report regularly: You can get a free copy of your credit report from Equifax and TransUnion once a year. Review your credit report carefully to make sure there are no errors or fraudulent accounts. If you find any mistakes, report them immediately to the credit bureau.
  2. Pay your bills on time: Late payments can negatively impact your credit score, so make sure you pay your bills on time every month. If you have trouble remembering, consider setting up automatic payments or reminders.
  3. Keep your credit utilization low: Your credit utilization is the percentage of your available credit that you’re using. Aim to keep your credit utilization below 30% of your total credit limit. For example, if you have a credit card with a $1,000 limit, try not to carry a balance of more than $300.
  4. Build a good credit history: The longer you’ve had credit, the better it looks to lenders. If you’re new to credit, consider starting with a secured credit card or a credit-builder loan.
  5. Avoid opening too many new accounts at once: When you apply for new credit, the lender will pull your credit report, which is called a hard inquiry. Too many hard inquiries in a short period can lower your credit score.

In summary, your credit score is an important factor in your financial health, and it’s essential to understand how it’s calculated and how to improve it. By checking your credit report regularly, paying your bills on time, keeping your credit utilization low, building a good credit history, and avoiding too many new accounts at once, you can improve your credit score and qualify for better loan terms and interest rates.