10 Credit Tips I Wish More Borrowers Knew Earlier | Sarah McLaren

We all know having good credit is key when it comes to getting a mortgage, but many people assume credit is all about the score when in fact, it's much more than just a number. I review hundreds of credit reports and I've put together 10 quick tips to help improve your credit score and profile. Feel free to share them!

1. Pay your bills on time

Obvious, but important nonetheless. Minimum payments need to be posted before the due date in the very least.

2. Keep your credit account balances under 30% of their maximum limit

Consider accepting pre-approved credit limit offers from reputable banks to help with this. Just make sure there are no extra fees or conditions involved and that you're comfortable managing a higher limit.

3. Never exceed your limit

Yes, even going over by $1 is too much.

4. Diversify your revolving credit (i.e. credit cards, lines of credit).

Many lenders prefer borrowers to have at least two established trade lines with a history of responsible credit management. Keeping your limit at $500 may feel responsible, but from a lender's perspective they want to see that you have experience managing larger amounts of credit before extending a mortgage.

5. Use your credit regularly, but responsibly!

Not only can you collect rewards points (🤩), but everyday purchases can and should help strengthen your credit profile. Use credit, then pay it off.

6. Older. Wiser. Better. Keep your old credit cards active.

Lenders value history and consistency.

7. Avoid multiple hard credit checks

Each hard credit check can impact your credit score if not timed strategically. Before you consent to have your credit checked ask if it is a hard or soft check. Soft checks do not affect your score.

Do not apply for credit without a plan. When suitable for your credit profile, take advantage of pre-approved offers and limit increases from trusted institutions that do not require a hard credit check.

8. Monitor your credit for errors, fraud, and opportunities to improve

Canadian consumers are entitled to free monthly credit reports through Equifax and TransUnion. If you spot an error, dispute it immediately.

Most bank apps now also offer free credit scores. These are less detailed but excellent for day-to-day snapshots.

9. Your credit profile is more than a number

It tells an in-depth story about your credit, payment, housing, and employment history. It plays a major role in identity verification and fraud prevention.

Your credit history can go back many years and reflects both positive payment history and missed payments. Make sure you're helping tell your story.

10. Unsure where to start?

Talk to a professional. Credit optimization is a nerdy passion of mine. Reach out or book an appointment with me if you would like to review your report together or if you have any questions.

If you’re unsure where to start, have questions about your credit profile, or want to understand how your credit may impact a future mortgage application, I’m always happy to help.

I hope these tips were helpful, and feel free to share them!