In today’s nearly cashless society, I fear that the upcoming societal outcasts (financially speaking) will be those with poor credit. Today, one can’t travel, rent a car, secure concert tickets in advance or even park in some underground garages without a credit card. Having a strong score or improving it now is paramount.

Keep in mind that your credit score is fluid and changes monthly.  If your score is great, you want to keep it that way. And if it’s less than spectacular, you can improve it. If you’ve never checked your credit report or score before, take a deep breath. Do it today.  (If you’ve never done so, you’re not alone but like most Canadians.)

In Canada, you can request a free credit report as often as you’d like. There are two main reporting agencies in Canada; and There may be a small fee to obtain your credit report.

Once you know your score, here’s what you can do to improve it:

5 tips to a top score

  1. Pay at least your minimum loan or credit card payment on time, every time.  Sounds simple, yet I see so many individuals pay their credit card minimum payment each month, but maybe just a day or two late here and there. Each time you’re late, it brings your score down. And remember, if you’re paying online, ensure to allow at least three business days for your payment to arrive (if your credit card isn’t with your bank – if it is, you can usually transfer the funds the same day).
  2. Keep your balances low.  The credit reporting agencies see a maxed out card as a big red flag and that drags your score down. If you are close to the max, you might need some help. Talk to your banker about a consolidation loan, or for more serious trouble, visit a non-profit credit counsellor for help.
  3. Never go over limit. If you’re nearly maxed out, remember to factor in your interest charge each month along with any pre-authorized payments. Some credit cards might allow you to go over limit by say $5 or $10, but charge a hefty $29 over-limit fee. If this sounds like your situation, call your credit card company and request that they don’t allow your account to go over limit. Not only can it be extremely costly, it hurts your score each month.
  4. Pay more than the minimum requested.  Even though your credit card company only requests a certain amount, paying even a few dollars more will get you out of debt sooner. Especially with some cards charging; 20-29%, that interest adds up.
  5. Don’t seek new credit.  If you don’t need it, don’t apply for it.  Each time you apply for credit, it’s registered on your credit bureau and if you apply for too much at once, it’s a red flag.  If you’re moving, for example, and need to make a lot of new purchases on credit, try to space applications out over six or twelve months.
Kelley Keehn is an award-winning author, personal finance educator and is the Consumer Advocate for the Financial Planning Standards Council (FPSC). She has written nine books on personal finance including Protecting You and Your Money; A Guide to Avoiding Identity Theft and Fraud and A Canadian's Guide to Money Smart Living. Kelley is the Marilyn Denis show’s personal finance expert, was the host of the W Network’s Burn My Mortgage, sat on the National Steering Committee on Financial Literacy, currently serves on the Financial Consumer Agency of Canada’s Consumer Protection Advisory Committee, the Ontario Securities Commissions’ Seniors Expert Advisory Committee, and is a member of the OECD’s International Network on Financial Education.