How to Manage and Increase Your Credit Score in Canada Through Your Credit Card?

May 3, 2023

Managing your credit score is important for your financial well-being in Canada. Your credit card activity can have a significant impact on your credit score, and it's essential to know how to manage it effectively. Here are 7 tips on how to use your credit card to manage and increase your credit score in Canada.

  1. Pay Your Bills on Time: One of the most crucial factors in determining your credit score in Canada is your payment history. Late or missed payments can negatively affect your credit score. Ensure you pay your credit card bills on time every month. Set up automatic payments or calendar reminders to avoid missing due dates. Keep Your Credit Utilization Low: Credit utilization refers to the amount of credit you use compared to your credit limit. Keep your credit utilization below 35% to maintain a good credit score in Canada. If you have a $10,000 credit limit, keep your balance below $3,500.

  2. Use Your Credit Card Regularly: Using your credit card regularly can help improve your credit score in Canada. However, don't use it too much, as high credit utilization can negatively affect your credit score. Use your credit card for small purchases, such as gas or groceries, and pay it off in full each month.

  3. Keep Your Credit Card Accounts Open: Closing your credit card accounts can negatively affect your credit score in Canada, especially if you have a long credit history. Keep your accounts open to show responsible credit management and long credit history.

  4. Monitor Your Credit Report: Check your credit report regularly for any errors or fraudulent activity. Request a free credit report from each of the two credit reporting agencies in Canada, Equifax, and TransUnion, once a year. Dispute any errors or fraudulent activity immediately.

  5. Consider Getting a Secured Credit Card: If you're new to credit or have a low credit score in Canada, consider getting a secured credit card. A secured credit card requires you to make a deposit, which becomes your credit limit. It can help establish a credit history and improve your credit score over time.

  6. Don't Apply for Too Many Credit Cards at Once: Applying for too many credit cards at once can negatively affect your credit score in Canada. Space out your applications over time, as too many hard inquiries can signal that you're desperate for credit and maybe a high-risk borrower.

If you're renting with Chexy, ensure that you pay off your credit card bill as soon as possible after your rent is paid to ensure stable and consistent credit growth. 

Improving and managing your credit score through your credit card requires responsible credit management. Follow these 7 tips to pay bills on time, keep credit utilization low, use your credit card wisely, keep accounts open, monitor your credit report, consider a secured credit card, and don't apply for too many credit cards at once. With time and effort, you can maintain a good credit score and enjoy better financial well-being in Canada.

Managing your credit score is important for your financial well-being in Canada. Your credit card activity can have a significant impact on your credit score, and it's essential to know how to manage it effectively. Here are 7 tips on how to use your credit card to manage and increase your credit score in Canada.

  1. Pay Your Bills on Time: One of the most crucial factors in determining your credit score in Canada is your payment history. Late or missed payments can negatively affect your credit score. Ensure you pay your credit card bills on time every month. Set up automatic payments or calendar reminders to avoid missing due dates. Keep Your Credit Utilization Low: Credit utilization refers to the amount of credit you use compared to your credit limit. Keep your credit utilization below 35% to maintain a good credit score in Canada. If you have a $10,000 credit limit, keep your balance below $3,500.

  2. Use Your Credit Card Regularly: Using your credit card regularly can help improve your credit score in Canada. However, don't use it too much, as high credit utilization can negatively affect your credit score. Use your credit card for small purchases, such as gas or groceries, and pay it off in full each month.

  3. Keep Your Credit Card Accounts Open: Closing your credit card accounts can negatively affect your credit score in Canada, especially if you have a long credit history. Keep your accounts open to show responsible credit management and long credit history.

  4. Monitor Your Credit Report: Check your credit report regularly for any errors or fraudulent activity. Request a free credit report from each of the two credit reporting agencies in Canada, Equifax, and TransUnion, once a year. Dispute any errors or fraudulent activity immediately.

  5. Consider Getting a Secured Credit Card: If you're new to credit or have a low credit score in Canada, consider getting a secured credit card. A secured credit card requires you to make a deposit, which becomes your credit limit. It can help establish a credit history and improve your credit score over time.

  6. Don't Apply for Too Many Credit Cards at Once: Applying for too many credit cards at once can negatively affect your credit score in Canada. Space out your applications over time, as too many hard inquiries can signal that you're desperate for credit and maybe a high-risk borrower.

If you're renting with Chexy, ensure that you pay off your credit card bill as soon as possible after your rent is paid to ensure stable and consistent credit growth. 

Improving and managing your credit score through your credit card requires responsible credit management. Follow these 7 tips to pay bills on time, keep credit utilization low, use your credit card wisely, keep accounts open, monitor your credit report, consider a secured credit card, and don't apply for too many credit cards at once. With time and effort, you can maintain a good credit score and enjoy better financial well-being in Canada.