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What’s The Best Way to Fix My Credit Score?

If you have a bad credit score, you’ll pay higher interest rates and have difficulty getting loans, renting an apartment or buying a home. Even though it can take up to seven years to repair a bad credit score, there are steps you can take now to regain control of your finances. Here are some tips.

man looking at credit card while research how to repair his credit score

Pay Your Bills on Time

Making loan, utility, and credit card payments consistently on time is the best way to repair your credit score. Follow these tips to improve your payment history:

  • always pay your bills before the due date

  • pay at least the minimum amount even if you can’t pay the entire balance

  • contact the lender if you think you can’t pay a bill

  • make payments even if they’re in dispute

To curb monthly overspending, sign up to receive electronic alerts from your financial institution notifying you when your available credit falls below a certain amount.

Don’t Exceed Your Credit Limit

Lenders frown on borrowers who consistently use most or all their available credit, even if they make payments on time. That means it’s advantageous to have a higher credit limit and use less. For example, using $1,000 worth of credit on a credit card with a $5,000 limit is better than using $500 on a card with a $1,000 limit (using 20 percent of available credit rather than 50 percent). Try to keep your monthly borrowing within about 35 percent of your available credit.

Lengthen Your Credit History

Having active bank and credit card accounts for a long time can help repair your credit score. If you transfer an old account to a new one, it’ll be considered new credit and won’t help. For example, some credit card companies offer low introductory rates for balance transfers. However, this becomes new credit and won’t help fix your credit score. Keep an older account open even if you don’t use it. Just ensure there are no fees.

Use Different Types of Credit

Using a variety of credit lines is better than just using a single source of credit, like a credit card. It’s better to use a mix of credit options such as a car loan, line of credit and credit card.

Seek Professional Credit Counselling Services

If you’re having trouble getting out of a financial crisis, seek the help of a professional credit counselling service. A financial expert can help you establish a monthly budget, reduce spending, and set short- and long-term financial goals.

Repair Your Credit Score with Credit Counselling in Ontario

At D. & A. MacLeod Company Ltd., our experts can recommend ways to fix your credit score and regain control of your finances. In addition to in-person consultations, we offer virtual appointments for clients across Canada. Contact us today to schedule a free, confidential consultation to learn about your credit counselling options.


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