How to Improve Your Credit Score in Canada: Free Step-by-Step Guide (2026)

A low credit score in Canada can block you from getting a mortgage, car loan, rental apartment, or even a cell phone plan. The good news: you can improve your credit score yourself, completely free, without paying a credit repair agency to do it for you.

This guide covers how Canadian credit scores work, what is damaging yours right now, and the step-by-step process to improve it — using the same rights and tools available to every Canadian under federal law.

How Canadian Credit Scores Work

In Canada, your credit score is calculated by two credit bureaus:

• Equifax Canada — scores range from 300 to 900
• TransUnion Canada — scores also range from 300 to 900

Canadian lenders generally use this scale to assess applications:

Score Range	Rating	What It Means
760 to 900	Excellent	Best rates on mortgages, cars, and cards
725 to 759	Very Good	Approved for most products at good rates
660 to 724	Good	Approved for most products, standard rates
560 to 659	Fair	May be declined or pay higher rates
300 to 559	Poor	Likely declined by most mainstream lenders

Unlike the United States, Canada does not use a single scoring model across all lenders. Equifax and TransUnion each produce their own score, and a lender may check one or both. This means your score can differ between bureaus — which is why you need to check and fix both.

According to FICO, the standard FICO factor weights are based on five key factors; other Canadian scoring models can differ:

• Payment history (35%) — whether you pay bills on time
• Credit utilisation (30%) — how much of your available credit you are using
• Length of credit history (15%) — how long your accounts have been open
• New credit applications (10%) — how many hard inquiries are on your file
• Credit mix (10%) — variety of credit types (cards, loans, lines of credit)

Step 1: Get Your Free Canadian Credit Reports

Under Canadian federal law (the Personal Information Protection and Electronic Documents Act — PIPEDA), both Equifax and TransUnion are required to give you a free copy of your credit report upon request.

• Equifax Canada — request your free report at equifax.ca. You can also access it instantly through Borrowell (free), which uses Equifax data.
• TransUnion Canada — request your free report at transunion.ca. You can also access it instantly through Credit Karma Canada (free), which uses TransUnion data.

Check both reports. Errors often appear on one bureau file but not the other, and lenders query either one — so both need to be accurate.

Look carefully for:

• Accounts you do not recognise (possible fraud)
• Late payments recorded when you paid on time
• Accounts listed as open that you have closed
• Old negative items that should have dropped off (most stay for 6 years in Canada)
• Wrong personal details — name spelling, old addresses, incorrect SIN association
• Duplicate accounts listed twice

Step 2: Dispute Errors on Your Canadian Credit Report

Errors on credit reports are common. A 2020 CBC Marketplace investigation found significant error rates on Canadian credit files, with some consumers losing access to credit or paying higher rates due to inaccurate information.

You have the legal right to dispute any inaccurate item under PIPEDA. The process is free.

How to dispute with Equifax Canada

1. Log in to your Equifax account and use the online dispute centre, or
2. Write to Equifax Canada Co., Consumer Relations Department, Box 190 Jean Talon Station, Montreal, Quebec, H1S 2Z2
3. Include your full name, date of birth, current address, the account in question, and a clear explanation of the error with supporting documents
4. Equifax must investigate and respond within 30 days

How to dispute with TransUnion Canada

1. Use the online dispute form at transunion.ca/ca/personal/credit-disputes, or
2. Write to TransUnion Consumer Relations, P.O. Box 338, LCD 1, Hamilton, Ontario, L8L 7W2
3. Include the same details as above with documentation
4. TransUnion must investigate and respond within 30 days

If the bureau does not resolve the dispute to your satisfaction, you can escalate to the Financial Consumer Agency of Canada (FCAC) at canada.ca/fcac, or file a complaint with the Office of the Privacy Commissioner of Canada at priv.gc.ca.

For guidance on writing an effective dispute letter, see our credit report errors dispute guide.

Step 3: Bring All Accounts Current

Payment history is the single largest factor in your Canadian credit score at 35%. A single missed payment can drop your score by 50 to 100 points and stays on your file for up to 6 years.

If you have accounts in arrears, contact the lender immediately. Most Canadian banks and lenders have hardship programs — especially since the pandemic — and can arrange a payment plan, deferral, or reduced payment without triggering a further negative mark.

The moment you bring an account current and resume on-time payments, the positive payment history starts rebuilding your score. There is no shortcut here, but the impact is real and cumulative.

Step 4: Reduce Your Credit Utilisation Below 30%

Credit utilisation — the percentage of your available credit limit you are currently using — accounts for 30% of your score. Canadian lenders and scoring models view high utilisation as a sign of financial stress.

If your credit card has a $5,000 limit and a $4,000 balance, your utilisation is 80% — which is significantly dragging down your score.

Target thresholds:

• Under 75% — small improvement
• Under 50% — moderate improvement
• Under 30% — significant improvement
• Under 10% — maximum benefit

Three ways to reduce utilisation:

1. Pay down balances. Prioritise getting individual cards under 50%, then 30%. Even moving one card from 80% to 45% provides a measurable score bump within one billing cycle.
2. Request a credit limit increase. Call your card issuer and ask for a higher limit without increasing spending. This lowers your utilisation ratio immediately.
3. Make mid-cycle payments. Your balance is reported to the bureaus at the statement close date, not the payment due date. Paying down before the statement closes reduces the reported balance.

Step 5: Build Credit History From Scratch in Canada

If you are new to Canada, a young adult, or have avoided credit in the past, you may have a thin or non-existent credit file. Canadian lenders see you as an unknown and typically decline applications. You need to create a track record.

Option A: Secured Credit Cards

A secured credit card requires a cash deposit (usually $200 to $500) which becomes your credit limit. Use it for small purchases, pay the full balance every month before the due date, and the on-time payment history builds your score within 3 to 6 months.

Canadian secured card options include:

• Home Trust Secured Visa — no annual fee option, reports to both bureaus
• Refresh Financial Secured Card — designed for credit building, reports to both bureaus
• Scotiabank Startright Visa — popular with newcomers to Canada

Option B: Credit Builder Loans

Credit builder loans work by holding the loan amount in a savings account while you make monthly payments. Each payment is reported to the credit bureaus, building your payment history. At the end of the term, you receive the savings.

In Canada, Refresh Financial and Spring Financial offer credit builder products specifically designed for Canadians with no or poor credit history.

Option C: Become an Authorised User

If a family member with a strong credit history adds you as an authorised user on their credit card, their account history can appear on your credit file. This is one of the most effective ways to establish a positive credit history. The primary cardholder does not need to give you access to the card — simply being listed is sufficient in most cases.

Option D: Newcomer Credit Programs

If you recently arrived in Canada, several major banks offer newcomer banking and credit programs that do not require a Canadian credit history:

• RBC Newcomer Advantage
• TD New to Canada Banking Package
• Scotiabank StartRight Program
• CIBC Newcomer Banking Package

These programs offer entry-level credit cards, often unsecured, specifically for newcomers without Canadian credit history.

Step 6: Limit New Credit Applications

Every time you apply for credit in Canada — a card, loan, line of credit, or phone plan — the lender runs a hard inquiry on your file. Hard inquiries stay on your report for 3 years (though their scoring impact fades after 12 months) and are visible to other lenders.

Multiple applications in a short period signal financial desperation to lenders and can drop your score by 10 to 20 points per inquiry.

Best practice: use pre-qualification or eligibility checkers (available on Borrowell and Credit Karma Canada) that use soft inquiries and do not affect your score, before submitting a formal application.

Step 7: Keep Old Accounts Open

Length of credit history accounts for 15% of your score. Closing your oldest credit card shortens your average account age and removes available credit (increasing utilisation). Unless the card charges an annual fee you cannot justify, keep it open and use it occasionally to keep it active.

Credit card companies in Canada may close inactive accounts after 12 to 24 months of no activity. Put a small recurring charge — a streaming subscription, a monthly bill — on old cards to prevent closure.

How Long Does It Take to Improve Your Credit Score in Canada?

Action	Timeline	Expected Impact
Dispute and remove an error	30 to 60 days	Larger
Reduce utilisation below 30%	1 billing cycle	Smaller
Secured card with on-time payments	3 to 6 months	Gradual steady improvement
Credit builder loan	6 to 12 months	Meaningful history established
Recover from a missed payment	6 to 24 months	Score recovers with consistent payments
Collections account removed (6 years)	6 years from date	Significant improvement

Relative levels only. Actual changes depend on your credit profile.

Your Rights as a Canadian Consumer

Canadian law gives you strong protections regarding your credit file:

• Free annual credit report — both Equifax and TransUnion must provide your full report for free upon request
• Right to dispute — under PIPEDA, you can dispute inaccurate information and the bureau must investigate within 30 days
• Right to add a consumer statement — you can add up to 100 words to your credit file explaining the context behind a negative item. Lenders must read this before making a credit decision.
• Retention limits — most negative information is removed after 6 years. Bankruptcies are removed after 6 years (first bankruptcy) or 14 years (subsequent bankruptcies).
• FCAC oversight — the Financial Consumer Agency of Canada supervises credit bureaus and can be contacted if you believe your rights have been violated

Canadian Credit Score FAQs

Does checking my own credit score hurt it in Canada?

No. Checking your own credit score or report is a soft inquiry and has zero impact on your score. Only hard inquiries from lenders when you apply for credit affect your score. Check your own report as often as you need to — it is free and safe.

How long do negative items stay on my Canadian credit report?

Most negative information — late payments, collections, judgements — stays on your report for 6 years from the date of the last activity. In Ontario, New Brunswick, and PEI the limit for collections is 7 years. Bankruptcy stays for 6 years after discharge for a first bankruptcy and 14 years for subsequent ones.

What is a good credit score in Canada?

A score of 660 or above is generally considered good by Canadian lenders. A score above 725 is very good and will qualify you for most products at competitive rates. Above 760 is excellent and will get you the best available rates on mortgages and other major credit products.

Can newcomers to Canada build credit quickly?

Yes. The most effective route for newcomers is to open a newcomer banking package with one of the major banks (RBC, TD, Scotiabank, CIBC), get their entry-level credit card, use it for small purchases, and pay it in full each month. Combined with a credit builder loan from Refresh Financial or Spring Financial, most newcomers can establish a functional credit score within 6 to 12 months.

Will a consumer proposal or bankruptcy stay on my record forever?

No. A consumer proposal is removed from your credit report 3 years after you complete all payments. A first bankruptcy is removed 6 years after discharge. Subsequent bankruptcies are removed 14 years after discharge. Both have significant impacts while on file, but they are not permanent.

Can I improve your credit score myself in Canada without paying an agency?

Absolutely. Every step in this guide is free to take yourself. Credit repair agencies in Canada cannot do anything for you that you cannot do on your own — they cannot remove accurate negative information, and they cannot legally guarantee results. Under PIPEDA you have the same dispute rights as any agency. Save the money and use this guide.

What is the most effective way to raise my credit score in Canada?

The two most effective actions are: (1) dispute and remove any errors from your Equifax and TransUnion files — this can help improve your score; and (2) pay down credit card balances to below 30% utilisation — this resets at each billing cycle and can help improve your score. Use our free credit score simulator to explore illustrative, simplified comparisons, not predictions of the impact on your actual score.

The Bottom Line

Fixing your credit score in Canada takes consistency, not money. The most impactful actions — disputing errors, reducing utilisation, and building a track record of on-time payments — are all free and available to every Canadian.

Your score can improve meaningfully within 3 to 6 months of focused effort. For a complete walkthrough of the credit repair process including dispute letter templates, read our full DIY credit repair guide.

Want to explore illustrative estimates before you act? Try our free credit score simulator to explore illustrative, simplified estimates of common credit habits, not predictions of your actual score.