What steps can you take to improve your credit score?

Equifax and TransUnion are Canada’s two main consumer credit bureau reporting agencies. These are the two primary sources where both secured and unsecured creditors will conduct a search for data on your borrowing history. Effectively managing your secured and unsecured debt repayment will position you to understand and improve your credit score. 

What is a credit score?

Your credit score is an indication of your creditworthiness. This means that potential lenders will look at your credit score to determine if you are a credit-worthy applicant. They may use your credit score (and your credit rating) as a means of deciding how much credit they can grant to you.

According to Equifax and TransUnion, credit scores range from 300 to 900 points, with a rating of 900 being the best score. Your credit report at the credit bureau will change over time as it is updated by lenders based on your debt repayment. If you have a high credit score, it may be easier to negotiate and obtain lower interest rates and additional credit from banks, credit unions, credit card companies, and other lenders. 

How to improve your credit score

Equifax will report a Bankruptcy on your credit file for a period of six years from the date of your discharge and will report a Consumer Proposal for a period of three years from the date of the full performance of the Consumer Proposal.

In Ontario, TransUnion will report a Bankruptcy for a period of seven years from the date of discharge and a Consumer Proposal for a period of three years from the date of full performance of the Consumer Proposal.

To improve your creditor score and avoid a negative impact on your credit rating, it’s important to:

1. Avoid missed bill payments
2. Pay your outstanding bills before the statement due date
3. Pay at least the required minimum statement balance
4. Stay within your credit limit

How to manage your credit bureau information

It is essential to ensure that your personal information at the credit bureau is reported accurately. Erroneous information may cause a potential lender to decline your application for credit. One way to ensure the accuracy of your personal information being reported at the credit bureau is to obtain and review a copy of your credit report from Equifax and TransUnion.

A good practice to follow is to check your credit report once a year to confirm that your name, date of birth, address, employment status, creditors, and amounts reported are accurate. You should ensure that creditors reporting at the credit bureau are in face creditors that you owe to or have an account with. This helps confirm that there are no fraudulent activities such as debts arising from identity theft, fraudulent use of your credit, or unauthorized inquires made against your credit file.

How to get a copy of your credit report

To gain a copy of your credit report, contact:

Equifax

1.800.465.7166
www.equifax.ca

TransUnion

1.800.663.9980
www.transunion.ca

Take control of your financial future

Understanding your credit score and effectively managing your debt repayment is crucial to improve your score and protect your financial health. If you are struggling with debt and financial stress, contact an MNP LIT. We have the knowledge to help you understand all the debt relief options available so you can choose the one that works best for your unique situation. Together, we can help you achieve a debt-free future.