For Existing Homeowners and Future Homeowners

What Is a Credit Score?

Your credit score is like a “financial report card.” It helps banks and lenders decide:

* If they will lend you money
* What interest rate you qualify for
* How much you can borrow

In Canada, credit scores usually range from:

**300–559** = Poor
**560–659** = Fair
**660–724** = Good
**725–759** = Very Good
**760–900** = Excellent

The higher your score, the better your mortgage and financing options may be.

The 5 Biggest Things That Affect Your Credit Score

1. Payment History (Most Important)

This means paying your bills on time.

Examples:

* Credit cards
* Loans
* Car payments
* Mortgage payments
* Cell phone bills
* Lines of credit

Best Practice:

✅ Always make payments on time
✅ Set up automatic payments if possible
✅ At minimum, make the minimum payment before the due date

What Hurts Your Score:

❌ Missed payments
❌ Late payments
❌ Collections or unpaid debts
❌ NSF or bounced payments

2. Credit Utilization (How Much You Owe)

This means how much of your available credit you are using.

Example:

If your credit card limit is $10,000:

* Using $2,000 = Great
* Using $8,000 = Too high

Best Practice:

✅ Keep balances below 30% of your limits
✅ Lower is even better (under 10% is excellent)

What Hurts Your Score:

❌ Maxed out credit cards
❌ Carrying large balances month after month

3. Length of Credit History

The longer you responsibly use credit, the better.

Best Practice:

✅ Keep older accounts open if possible
✅ Use older cards occasionally to keep them active

What Hurts Your Score:

❌ Closing old credit cards
❌ Constantly opening new accounts

4. Credit Checks (Inquiries)

Every time you apply for financing, lenders may check your credit.

Best Practice:

✅ Only apply for credit when needed
✅ Work with one trusted mortgage broker instead of multiple lenders separately

What Hurts Your Score:

❌ Applying for many credit cards or loans quickly
❌ Multiple hard credit checks in a short time

5. Types of Credit

Having different kinds of credit can help.

Examples:

* Credit cards
* Car loans
* Mortgage
* Line of credit

Best Practice:

✅ Manage different credit types responsibly

What Hurts Your Score:

❌ Too many payday loans
❌ Too much unsecured debt

Step-by-Step Plan to Improve Your Credit Score

Step 1: Check Your Credit Report

Review your Equifax Canada report for:

* Incorrect balances
* Accounts that are not yours
* Old debts that should be removed
* Incorrect late payments

You can check your report here:

Equifax Canada CLICK HERE

Step 2: Make Every Payment On Time

This is the fastest way to build credit over time.

Helpful Tips:

* Use calendar reminders
* Set up automatic minimum payments
* Pay bills a few days early

Step 3: Lower Credit Card Balances

Aim to keep balances:

* Below 30% of the limit
* Ideally below 10%

Example:

If your limit is $5,000:

* Try to stay below $1,500
* Under $500 is even better

Step 4: Avoid Applying for Too Much Credit

Before applying for:

* Credit cards
* Car loans
* Financing

Ask yourself:

“Do I really need this right now?”

Too many applications can temporarily lower your score.

Step 5: Keep Older Accounts Open

Even if you do not use a card often:

* Small purchases every few months can help
* Pay them off right away

Step 6: Create a Monthly Budget

Good budgeting helps prevent:

* Missed payments
* High balances
* Debt stress

Focus on:

✅ Reducing debt
✅ Paying bills early
✅ Building savings

Credit Tips for Homeowners

Existing Homeowners

Best Things You Can Do:

✅ Make mortgage payments on time
✅ Avoid taking on unnecessary debt
✅ Keep HELOC balances manageable
✅ Avoid refinancing too often without a plan

Be Careful Of:

❌ Missing mortgage payments
❌ Using home equity for ongoing spending
❌ Taking on large monthly obligations

New Homeowners

Important First-Year Tips:

✅ Keep emergency savings
✅ Avoid financing furniture immediately after possession
✅ Do not open multiple new credit accounts after buying a home
✅ Continue paying all bills on time

Many people hurt their credit after buying by:

❌ Maxing out cards for renovations or furniture
❌ Missing payments during the move
❌ Taking on too many monthly payments

What NEGATIVELY Impacts Your Equifax Credit Score

These are some of the biggest credit score mistakes:

❌ Late payments
❌ Missed mortgage payments
❌ Maxed-out credit cards
❌ Collections
❌ Bankruptcy or consumer proposals
❌ Multiple credit applications
❌ Payday loans
❌ Closing old credit accounts
❌ High debt balances
❌ Bounced payments
❌ Unpaid phone bills or utilities

How Fast Can Your Credit Score Improve?

Everyone is different, but many people start seeing improvements within:

**30–90 days** after lowering balances
**3–6 months** of on-time payments
**6–24 months** for major rebuilding

Credit scores improve with consistency over time.

How to Correct Errors on Your Equifax Report

Mistakes on a credit report can happen.

Examples include:

* Incorrect late payments
* Wrong balances
* Accounts that are not yours
* Identity theft issues

Steps to Dispute Errors with Equifax Canada

Step 1: Gather Documents

Examples:

* Bank statements
* Payment confirmations
* Letters from lenders
* Identification

Step 2: Contact Equifax Canada

Online:

Equifax Canada Dispute Centre CLICK HERE
Phone:
1-800-465-7166

Mail:
Equifax Canada Co.
National Consumer Relations
P.O. Box 190
Montreal, Quebec H1S 2Z2

Step 3: Wait for Investigation

Equifax will contact the lender or creditor to verify the information.

Typical timelines:

* Investigations often take **5–30 days**
* Updates to scores may appear within **30–60 days**
* Sometimes faster depending on the lender

Final Credit Success Tips

To Build Strong Credit Over Time:

✅ Pay everything on time
✅ Keep balances low
✅ Avoid unnecessary debt
✅ Review your credit regularly
✅ Keep older accounts active
✅ Create a monthly budget
✅ Be patient and consistent

Small positive habits each month can create major improvements over time.

Need Help Understanding Your Credit or Mortgage Options?

Whether you are:

* Buying your first home
* Renewing your mortgage
* Refinancing debt
* Improving your credit
* Planning for future homeownership

Schedule a credit review to discuss over the phone, click here to BOOK A CALL