The past year has not been easy. Many people have had to go into debt to make up for a job loss or reduced employment income. If you’re hyperventilating when your credit score goes down, we have some tips for you.

First of all, remember that your credit score is a number that lenders typically use to decide whether or not to offer you credit. If you want to buy a property, a car, or even a new cell phone plan, your credit score will be checked. 

WHAT CONSTITUTES A GOOD SCORE?    

Your credit score is somewhere between 300 and 900. If your score is below 500, you may have trouble getting a loan. If it’s over 700, you are considered an excellent payer. The average credit score is usually between 500 and 700.

SIX TIPS TO INCREASE YOUR SCORE    

To improve your credit score, you will need to gain the trust of lenders by showing that you quickly pay back your loans. 

1- Keep your credit card balance below 30%

Paying your minimum balance every month is not enough. If you want to improve your score, be sure not to leave large amounts sitting on your statement. If you have a credit limit of $1,000 on one of your cards, try not to leave a balance of more than $300 at the end of the month. Ideally, pay off your credit card in full every month.

2- Pay BEFORE the deadline

Whether it’s your electricity, internet, cell phone bill, or even your credit card, try to pay before the deadline, not on the date itself. Some people have a habit of setting a payment reminder on the due date, but this is a delay…and every monthly delay affects your credit score.

3- Don’t close your unused accounts

If you have several credit cards, try to pool your balances on one or two cards at the most, ideally on the one that offers the best interest rates, and pay off the full balance of the other cards. However, keep the unused accounts open for as long as possible. The same goes for your lines of credit. This strategy will help show that you are a stable payer.

4- Make a budget

Good old budget advice. Not only to keep tabs of money in and out, but also to know what to pay off first.

Be sure to pay off the accounts where the interest rates are higher, since they cost you more. Your budget will also allow you to determine a precise amount dedicated to paying off your overdue accounts.

5- Avoid multiple financing requests

Whether it’s for buying a car, new furniture for your living room, or even a simple loan request, too many credit applications will affect your score. The more you apply for financing, the more you will appear to be living beyond your means. Basically, only apply for the credit that you really need

6- Diversify your credit

If you have different products, like a line of credit, a car loan, and a credit card, you are proving that you can handle your borrowing well. If you can pay them on time, of course. If you only have one or more credit cards, your score may be lower.

Sources : Gouvernement du Canada, Transunion, Raymond Chabot, Sun Life