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