There is one topic in money that everyone can agree on, and that’s wanting to improve your credit. People who have bad credit want good credit and people who have good credit want great credit. Watching that three-digit number grow is like a drug, but you know, a good one.

If you are working on bringing your score up into that ‘good’ range, there’s one thing you need to know. There is no quick-fix for bad credit. I repeat, there is no quick-fix for bad credit. If you Google ‘bad credit’ or ‘fix credit score’ you will get endless results from places promising you a quick fix. These are scams. They will cost you money and do nothing to fix your credit. As long as you make your payments and don’t take on too much debt your credit will improve, it just takes time.

For those who know that a high credit score is worth striving for but don’t know what that means, here’s a quick breakdown.

How Your Credit Score Is Calculated

Your credit score is determined by weighing a bunch of different factors ranging from your payment history to your current debt usage. When you make a payment on a bill, it gets reported on your credit, whether it was on time or not. Late or missed payments will bring your score down, and bills that are sent to collections will hurt it even more. A consistent history of making payments to a variety of lenders makes you look like a safe bet for future lending.

The history part is also crucial because companies need something to go on when reviewing you for a loan. If you have little to no history of paying your bills, then your credit score will be low. That’s why it’s a good idea to get a credit card (with a low limit) when you’re young. Start building that good history early.

Prospective lenders will also look at how much debt you have versus how much debt has been offered to you. This is referred to as your credit utilization rate. For example, if you have one credit card with a limit of $5,000 and a current balance of $2,900, your credit utilization rate would be 58%. That’s high. Your goal should be to keep that under 30%. This is why you might hear (bad) advice to increase your credit limit to improve that ratio. Yes, this can give you a superficial boost to your credit, but the better way is to bring your debt down.

Other smaller factors that determine your score include having a mix of credit (i.e. not all credit cards) and inquiries. When a company runs a credit check on you, it can bring down your score. This isn’t a big deal unless your credit is already on the low end and you are requesting numerous inquiries. Usually, this is a warning sign that other lenders are rejecting you. Don’t worry though, checking your own credit will not affect your score. That is called a soft inquiry and is a-ok. Hard inquiries come when you ask a company to lend you money.

Borrowell Credit Score

Checking Your Credit

I’ve talked about this before on the blog, so you can check this post to get those details. It’s a good idea to check your credit report annually to make sure there aren’t any errors or omissions. Your credit report is the critical part; your score is just a baseline. It’s kind of like finding out the score in last night’s hockey game. You know your team lost 5-3, but you have no idea how the game actually went. Did they get crushed or was there a controversial call and an empty-netter. (Is my jaded Oilers fan persona showing through?)

Why Credit is (Kind of) Important

Your credit score is not the financial holy grail. Having a bad score can seriously suck if you want to buy a house or a car or that Black Friday deal TV. But {truth time}, if lenders aren’t willing to give you access to credit, there’s a good reason for it. You need to get your financial ducks in a row before you take on more debt.

Aim to get your score into the high 600’s. This will put you into the ‘Good’ credit category and make lenders see you in a much more positive light.

Your next goal will be to break the 750 barrier into ‘Excellent’ credit. This will get you the best interest rates and the easiest access to credit if you need it. As long as you can stay above that mark, then you’re doing great.

Why only kind of important? Building and improving your credit is very important when it’s bad, but the importance lessens the better your number gets. If you have firmly secured your place above the 750 mark, then it doesn’t really matter whether you’re sitting at 790 or 840. Sure, it’s exciting to watch that number peak, but it no longer needs to be a priority.

A Good Score Doesn’t Mean You’re Good With Money

You know that old stats adage that ‘correlation does not imply causation’. This absolutely applies when we’re talking about credit scores and finances in general. Sure, a lot of people who have a good handle on their money will also have a high credit score. But not always. It could be someone who is climbing out of debt but has frugal living down to a tee. They might know everything there is to know about money but are still working to build their credit back up.

You can also have a near perfect credit score but have no emergency fund, no retirement savings, and no idea how to get started. You might get an A+ for credit, but an F everywhere else still means you’re failing. This is also a scary situation because with no savings you could be one costly mistake from a plummeting score.

5 Steps to Better Credit

I said there are no quick fixes to improving your credit, and that’s true, but there are a few things you can do to make sure your score starts going up instead of down. Bad credit isn't the end of the world. Find out why it's important and how to raise it.

  1. Check your credit report for mistakes
    • Pull your full credit report annually and check to make sure all entries are correct.
  2. Make ALL payments on time and in full whenever possible
    • You need good history to start outweighing bad history by pushing it further down your report.
  3. Tackle your existing debt with either the snowball or avalanche method
    • Choose whichever method speaks to you and get that debt paid off once and for all.
  4. Don’t make any new requests for credit
    • Hard inquiries can bring down your score so avoid them at all costs. That means making do with what you have and no new credit cards.
  5. Keep your existing cards active
    • The simplest way to do this is to have a recurring payment charged to each card and then set up an auto-payment from your chequing account to that credit card each month. Completely hands off but the history will look good, and it won’t raise your credit utilization.

Is one of your goals to raise your credit score this year? Have you struggled with bad credit in the past? Share your stories in the comments below. 

Bad credit isn't the end of the world. Find out why it's important and how to raise it.

This post was proofread by Grammarly


  1. Thanks to borrowing over $200,000 for medical school, I have a great credit score. It does not, sadly, mean that I earned that credit score by being good with money.

    • Sarah Reply

      Amazing how that works isn’t it. Your credit score puts all the emphasis on borrowing money and not on building wealth.

  2. My credit score (I recently checked it, I hadn’t known what my score was for years) is not excellent but I had just opened up a new credit card for travel hacking haha. I didn’t know that checking your score wouldn’t affect your credit score.

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