A hand checking an "Excellent" box with a green marker, under the header "Credit Score."

5 ways to quickly boost your credit rating

A low credit score can affect a number of different financial and non-financial aspects in your life. In the big picture, if you have a low credit score you may not be able to rent an apartment, receive a job offer or lease a car. Other effects of a less-than-perfect credit score is that you may not be able to open a bank account or apply for a credit card. The goods news is, financial woes are only temporary and there are several ways to improve your credit score fast.

Here are five ways to improve your credit score sooner than later:

Bring your accounts into good standing

Repeatedly late or missed payments are death to your credit score. If you are more than 30 days behind on a payment, the creditor will report the behaviour to the credit bureaus (Equifax and TransUnion) and it will lower your credit score.

If you want to improve your credit score fast, the first step is to bring all credit accounts out of arrears and into good standing. From there you can budget to fit all bills into your monthly expenses and avoid making late payments in the future.

Avoid late payments

The Canadian Office of Consumer Affairs says, “Always pay your bills on time. Although the payment of your utility bills, such as phone, cable and electricity, is not recorded in your credit report, some cell phone companies may report late payments to the credit-reporting agencies, which could affect your score. Try to pay your bills in full by the due date. If you aren't able to do this, pay at least the required minimum amount shown on your monthly credit card statement.”

Pay off your balances

Many people don’t know this, but high outstanding balances – even if you’re making the minimum monthly payments on time – can harm your credit score. It’s recommended to keep outstanding balances as low as possible and below half of the total credit limit.

Overspending and high outstanding balances for long periods of time will lower your credit score, so don’t let them linger. If making several payments each month is hard to manage, a personal consolidation loan is a good solution because one payment is easier to keep track of than several different payments.

Closed unused credit

It’s no secret that paying off credit card debt is difficult. You can avoid the temptation of spending by closing all unused and unneeded accounts. You may have needed that loan, line of credit or credit card at one time, but if you haven’t used it in the last three months, then get rid of it.

Keep at least one credit card open and establish good behaviours to help improve your credit score fast, but inactive accounts can lower your credit score, so wave good-bye to them.

Use your credit wisely

Bringing your accounts into good standing, making payments on time and closing unused accounts can all help improve your credit score fast. However, your financial behaviour also needs to change if you want to regain financial worthiness in the eyes of lenders.

Using your credit card within a limit you can afford, and paying off the balance in full will, help your credit score increase over the long-run. With good all-around behaviour, you will see your credit score improve within six to 12 months.