How long does it take to fix credit

Whether you’re looking to buy a home, rent a new apartment, or open a new line of credit, the decision often comes down to a three-digit figure: your credit score.

The average Canadian's credit score sits around 650, which is considered ‘fair.’ If your number is below-average, you might be looking for a way to fix your credit score. Improving your credit score can take time, but with the right strategy you can push your score from fair to excellent.

What is a Bad Credit Score?

In Canada, your credit score ranges from 300 to 900. Here’s how your score is typically categorized:

Credit score range

Category

Below 560

Poor or bad

560 to 659

Fair

660 to 724

Good

725 to 759

Very good

760 and up

Excellent

A “bad” or poor credit score would fall below 560. If your current credit score falls in this bucket — or nearby — there are simple ways you can take strides to start improving your credit profile.

How to Fix Credit Quickly

Fixing your credit takes time, but since your credit score is made up of different criteria, there are smart ways to nudge your score up more rapidly.

• Make on-time payments. Your payment history makes up 35% of your credit score in Canada, so aim to pay at least the minimum on time each month. You can set up automatic payments so you never have to worry about late payments again.

• Work to lower your debt. If you’re carrying debt on your credit cards, create a debt payoff plan to help bring your balance down. Doing this will not only save you money in interest, but it will help lower your credit utilization. Your credit utilization — how much credit you use versus how much you have access to — makes up 30% of your credit score, so lowering this number will help boost your credit score.

• Use less than 30% of your credit limit. Even if you pay off your bills in full each month, using less than 30% of your credit line will also help keep your credit utilization low.

• Add rent payments to your credit score. If you pay rent, you can have this expense count towards your credit score. It usually requires a small fee, but it may be worthwhile if you’re looking to improve your credit score quickly.

• Apply for a new credit card. If you only have one credit card, consider adding another line of credit to help grow your score even faster with two sets of on-time payments each month. Make sure you’re likely to be approved before adding a new card by using the credit card issuer’s preapproval tools. Checking your credit score during the application process can temporarily affect your credit score. You can avoid this by applying for a card — like KOHO’s credit builder card — that does not require a set credit score to get approved.

• Check your credit score regularly. Check-in on your progress monthly or quarterly to make sure no surprises pop up on your credit profile. You can check your credit report and credit scores for free from the two major credit bureaus in Canada: Equifax and TransUnion.

How Long Does It Usually Take to Fix Credit?

You won’t be able to improve your credit score overnight. How long it takes to fix your credit score will depend on where you’re starting. If your credit score falls in the “bad” category, it may take six months to a year to see noticeable improvements. If your credit score is just under the tier you’d like to move toward, you might see a more immediate improvement in just a few months.

Make payments on time, eliminate any credit card debt, and stay well under your credit limits to help grow your credit score. Once you’ve mastered these habits, you can graduate by adding another credit card or asking for a credit limit increase to help bolster your score even more.

Your credit journey is a lifelong process

Once your credit score jumps up, you’ll still need to remain consistent to keep your score high. Your credit journey may not be perfect, and it might have dips and peaks throughout the course of your life. Continue to check in on your progress and make adjustments if your score starts to falter.