There is no miracle recipe for rebuilding a mismanaged credit report. They promise to do it? Quite often, they will offer you a high-interest loan and will tell you that by repaying it regularly and on time, your credit report will improve.

However, the Credit Bureau knows who is lending, and not all creditors carry the same weight. A financial institution will have a lot of clout, but a private lender, very little.

This solution, which will bring you nothing positive, will, on the contrary, get you further into debt. If it’s too good to be true, it’s… not true! One must really exercise caution.

7 useful tips to improve your score

1. Make sure your credit report is error-free.
2. Avoid making multiple credit requests from creditors.
3. Know your debt-to-income ratio.
4. Pay your accounts on time.
5. Keep your credit card and line of credit balances low.
6. Keep your old accounts.
7. Be stable in your job and place of residence.

Let’s take a closer look at the tips mentioned above to improve your score:

1. Make sure your credit report is error-free: Before applying for a loan, order a copy of your credit report from Equifax or TransUnion, and ensure that it does not contain any errors. If it does, have them corrected immediately. An application that is well-prepared with the help of an agent from your financial institution, requesting a reasonable credit limit, will reduce your risk of a loan refusal and prevent the negative rating in your report that is attached to such a refusal.
2. Avoid multiplying credit requests from creditors: Refused requests have a detrimental effect on your score. If you are shopping around for a house or car, make all loan applications within a two-week period. They will then be grouped together and considered as one single request.
3. Know your debt-to-income ratio: Before meeting with your financial adviser, calculate your debt ratio yourself using our calculation tool. If it is too high (over 40%), there is a good chance that your loan will be refused, which will negatively affect your score.
4. Pay your accounts on time: Pay your bills within the allotted time. Regardless if the amount owed is high or not, a late-payment remains a late-payment. A rating of R-3 or worse is poorly looked upon by your creditors, whether for an unpaid amount of $2,000 or $200. And unfortunately, all poor ratings stay in your file for 6 years.
5. Keep your credit card and line of credit balances low: Ideally at 35% or less of the authorized limit, because It is at this percentage that your score will improve the most. Between 35% and 50%, it also improves, but less. If your balance is over 50% of the authorized limit, your score will be negatively affected.
6. Keep your old accounts: Accounts (credit cards/credit lines/personal loans) that have been open for a long time are more “beneficial” to your score than newly acquired ones. Keep them open, if possible, but without multiplying them.
7. Be stable in your job and place of residence: Creditors are reassured by the stability of their clients. Therefore, avoid changing jobs too often or moving every year…
    

Finally, remember that it’s not because a financial institution offers you credit that you should accept it!