If your   dream is to buy a home and you don’t have the cash, you’ll need to rely on   credit to help you to achieve your goal. Today, if you have good credit you   could, for example, purchase a $200,000 home with as little as a 5% down   payment and have smaller monthly payments compared to someone who has poor   credit and who buys the same $200,000 home with a 25% down payment.    Most mortgage lenders in Canada require a minimum Beacon Score of 600 to   qualify for a mortgage.  The better your credit score – the better   mortgage interest rate you will qualify for!

Here’s   10 ways you can improve your credit score:

10. Learn what your   current credit score is and what appears on your credit report.   Equifax and Transunion are Canada’s two credit reporting agencies, and   both provide free access to your credit report.  There may be a small   charge to obtain a report that includes your current FICO or   Beacon score.

9. Don’t open new credit cards that you don’t need just to   increase your available credit. This approach could backfire and actually   lower your score.

8. Try to keep your total account balances as low as possible.   High outstanding debt may negatively affect your score, as you have a greater   chance of missing payments.

Tip:  To optimize your credit score, try to keep the   balance owing on a credit line to no more than 70% of your limit.  In   other words, if you have a credit card with a $1,000 limit, try not to exceed   a balance owing of more than $700.  The closer you get to your limit,   the credit scoring algorithym begins to penalize you in points.  If you   are only $1.00 over your limit, your score will be negatively impacted as   much as 50 points!

Pay off any unpaid collections and send in the receipts to   Equifax and Transunion.  If the outstanding collections are very old you   may be able to settle the collection, but you will still need a receipt to   prove the balance owing is zero in order to obtain mortgage financing.

6. Correct any   incorrect information that might appear on your credit report.

5. If your credit is   severely damaged, or you have a very short credit history, there are still   ways to improve your credit over time. Consider opening new accounts   responsibly and paying them off on time.  The easiest way to improve   severely damaged credit is to apply for a secured credit card that reports on   both Equifax and Transunion bureaus.

4. If you need help building your credit from scratch or   re-establishing credit after bankruptcy or consumer proposal consider taking   advantage of a secured credit card.

3. To minimize the number of inquiries on your credit report,   don’t apply for multiple credit cards over a short period of time, or for a   card you’re not likely to get. Apply for new credit accounts only as needed.

2. Make all of your payments on time.   If   forced to miss a payment, be sure to pay the following month.  Accounts   more than 60 days past due will be indicated on your credit report.

And the number one way is…

1. Continue to check your credit report regularly, correcting   errors and inaccuracies that can damage your credit score.