Guide to Rebuilding Credit

CreditHelper’s Guide to Repairing and Rebuilding Your Credit Score

Who We Are

CreditHelpers offers simple loans and other credit assistance products to people who have no credit or less than perfect credit. Our services involve access to numerous financial institutions plus our in-house financing, which means you’re getting a one-stop solution. Also, we provide the resources you need to understand and rebuild credit. Once your credit is rebuilt, we can help you with prime credit financing. With all the information in hand, you can get a car loan from a trustworthy source and improve your credit score at the same time. 

Why We Wrote This Guide

If you don’t know what your credit score is, you’re not alone. Responsible people end up with low scores without noticing; it’s not an uncommon problem in Canada. Over half of Canadians have never checked their credit score, and about a quarter of Canadians have an average to low-ranking credit score. Figuring out how your credit score works, who manages your credit, and how you can improve it can be confusing, so it’s no wonder so many Canadians go without the information they need.

Think of your credit history and credit score as a profile telling others how dependable you are when borrowing money. Insurers, employers, landlords, utility companies, and other lenders use your credit score to gauge how predictable or risky their investment in you will be.

Without the right credit score, you may be turned down for the loan you asked for, or you may be tempted into too-good-to-be-true offers from untrustworthy sources. Your low credit score shouldn’t be taken advantage of by any company trying to put you in a worse situation. Car loans don’t have to be stressful. CreditHelpers is a credible source that will enable you to make smart choices when it comes to your loans.

What You Can Gain from This Guide

Low credit scores can make it difficult to get a reasonable loan.The lower your credit score is, the higher your interest rates and payments tend to be. Though your credit history cannot be changed, there are ways you can improve your credit score in the future. 

Paying your bills on time isn’t the only factor impacting your credit score; that’s a common misconception. There are several other reasons why credit bureaus – the  agencies that gather your credit history – are ranking you low. If you ever forgot to pay a cell phone bill on time, it probably lowered your credit score. If you have never taken out a loan before, you may not even have a credit score at all. It’s important to understand what credit scores are, why you have a certain credit score, and how you can improve it, so you can get an affordable car loan while avoiding scams.

You’re not alone: one in four Canadians has a less than perfect credit score.

Understanding Your Credit History and Score

What does a credit score look like?

Credit scores in Canada are marked on a scale from 350 to 900. Scores between 600 and 800 are considered average. Scores below 550 are considered extreme risk, and scores of 800 and above are excellent. The more points you have on your credit score, the less risky you look to a lender, and the better off you’ll be. For example, if a person decides to take out a loan on a car with a credit score of 720, the down-payment and interest rate would typically be half of the cost for a person with a credit score of 590.

What’s on my credit report?

Before you start evaluating your report, it’s important to understand how it’s formatted. On your report, you’ll find your personal information, credit information, banking information, public records, collection information, consumer statements, and credit report inquiries. The bureau receives this information from your lenders every time you apply for credit or monthly as your creditors report your payment history.

What is a credit bureau?

Contrary to how it may seem, credit bureaus are not regulated by the government. However, legislation called the Fair Credit Reporting Act is in place to oversee credit bureau activity. Remember, credit bureaus are publicly traded, for-profit businesses working with banks and credit issuers to record your credit activity. They exist to help lenders, so your personal information, at the end of the day, is your responsibility. It’s in your best interest to make sure that what credit bureaus records are correct. As well, make sure you check your position with both credit bureaus – your lenders might send information to one credit bureau but not the other.

Where can I find my credit report?

You can order your credit report for free once a year from one of two credit bureaus: Equifax Canada (where it’s called a “credit file disclosure”) or TransUnion Canada (where it’s called a “consumer disclosure”). When you apply for your credit history, it’s called an inquiry. Your credit score will be called a FICO score, which stands for Fair Isaac Corporation, the group that invented it. The process involves filling out forms online, providing two pieces of ID, giving your SIN and credit card number, and receiving the report by mail. It’s important to get your credit history from one of these trustworthy sources. Unfortunately, there are organizations out there that will claim to provide free services, and then steal your personal information. Protect yourself from fraud and unexpected offers. 

 What do the letters mean in my credit report?

I – Installment Credit – You borrow money for a specific period of time, for example, a car loan

O – Open Status Credit – You can borrow money up to a certain limit, for example, a cell phone

R – Revolving (or Recurring) Credit – You can borrow money up to a limit and payments vary depending on the balance of account certain limit, for example a credit card

M – Mortgage Loan – Mortgage information may be included on your  credit report  

What do the numbers mean in my credit report?


  • Too new to rate        
  • Approved, but not yet used


  • Paid within 30 days of billing
  • Pays as agreed


  • Late payment: 31 to 59 days late


  • Late payment: 60 to 89 days late


  • Late payment: 90 to 119 days late


  • Late payment: more than 120 days late, but not yet rated a “9”


  • This code is not used


  • Making regular payments using one of the following debt management options:
  • a consolidation order
  • orderly payment of debts consumer proposal
  • debt management program with a credit counselling agency


  • Repossession


  • Written off as a “bad debt” 
  • Sent to collection agency 
  • Bankrupt

What should I watch out for in my credit history?

Research indicates that 20% of people have found errors in their credit report. It’s important to look through your credit report closely. If you find anything wrong, you can fill out a dispute letter and send it to the bureau you received your report from. Once you have sent the dispute letter, wait a while and then follow up to make sure that your letter was received. Negative information on your credit history lasts for 7 years. Make sure your report is correct. If you run into any problems getting your dispute resolved, you can call the Financial Consumer Agency of Canada ( to get some help. They can point you to other options to make sure that your errors get fixed.

Why is my credit score low?

Lenders want to know they can depend on you. Where you are living, how long you have been employed, and what kind of loans you’ve taken out are a reflection of how you manage your finances. While not all the reasons for credit scores are disclosed by credit bureaus, there are some commonly known factors. In the next section, we’ll go into more detail on what the guidelines are and how you can follow them to improve your credit score.

Improving Your Credit Score

Before we explain some steps you can take to improve your score, it’s important to know what credit bureaus consider most important. Paying your bills on time is a large part, but there are a few other things you should be aware of:

1. Payment history makes up 35% of your credit score.

Do you pay your bills on time? How many bills have you missed? Paying your expenses early is generally a good thing.

2. Credit utilization makes up 30% of your credit score.

What is the ratio of your credit limit to balance? If you have a $3,000 limit and a $2,000 balance, that means you have a 67% utilization score. The higher the utilization score, the lower your credit score will be. If you’re using more than 35–50% of your available credit, it may negatively affect your score.

3. Length of credit history makes up 15% of your credit score.

How long have you had a credit card? How long have you been building credit? It’s better to have credit for longer. Don’t close accounts that have good payment histories.

4. New loans and credit applications make up 10% of your credit score.

How many credit inquiries have you made? How many loans have you applied for?  The more you’ve applied for, the lower your credit score will be.

5. Varied types of credit make up 10% of your credit score.

Do you have revolving credit (Visa, MasterCard, or retail store card), non-revolving credit (American Express, Diners Club), or installment credit (loans)? If you have different types of credit, then your credit score will be higher.

How does bankruptcy affect my credit score?

Even if you’ve been discharged from bankruptcy, the Credit Bureau will keep this information on record for 7 years. If you go bankrupt for the second time, this information stands on your credit history for 14 years. Getting out of bankruptcy can take a long time. To help you reestablish your credit, start saving money, pay all your bills on time, and potentially look into getting a secured credit card.

Are there quicker ways to fix my credit score?

Unfortunately, there are no quick fixes to this problem. If you come across any ads or promotions for “fast auto loans upfront” or a “guaranteed loans strategy,” be careful. There are discreditable companies offering car loans and financing options. Try to be patient. It may seem frustrating at first, but remember that your situation doesn’t have to be permanent. If you work on improving your credit practices, you’ll see your score change over time. 

Getting the Vehicle and Credit Score You Need

Believe it or not, taking out a loan on a vehicle can help you improve your credit score. Remember, you can raise your score with a variety of credit types. A car can be a great option if you don’t have installment credit on your credit history. On top of this, compared to mortgages and other high-interest loans, car loans are lower cost and the payment times are shorter.

This means you’ll have a better chance of boosting your credit with less stress. Taking out a car loan to boost credit is most effective if you plan ahead and practice the following habits:

  1. Save cash to make a down-payment. The larger your down-payment, the less your loan and monthly payments will likely be.
  2. Select a car within your budget. Avoid putting yourself in a situation where you can’t meet a payment on time because you chose a car that was too expensive for your lifestyle.
  3. Make your monthly payments on time. Remember, this makes up 35% of your credit score. Create a schedule in your diary, make notes on your fridge – whatever you need to stay organized.
  4. Pay more than the minimum required each month. Giving more than you’re expected to shows that you’re responsible.
  5. Reach below 30% owing as soon as possible. The quicker you reach your goal, the quicker your credit score will go up.
  6. Apply for a payment period of 3 to 4 years. The quicker you reach your goal, the quicker your credit score will go up.
  7. Avoid grace periods. Although you may be given extensions on payments, taking them won’t help your credit score.

Working with CreditHelpers

Are You Ready To Apply?

We hope this guide has provided you with useful information and practical tips that help you feel more informed and confident as you shop for a new vehicle. We would love to help you find that new vehicle. Get started now.

Apply for Your Car Loan

Applying for a car loan shouldn’t be stressful. We ask only for the information we need and finishing your application takes less than 15 minutes. Get started now.

What Our Customers Are Saying

“I was just starting a consumer proposal. I thought there was no way I’d get approved for a car. I got in touch with Vic. He was amazing and so helpful. A week later I’m in my new car and it was something I really wanted. Interest rate is good for someone in my situation. I would highly recommend it.”

—Rochelle P.