Top 5 Ways to Improve Bad Credit and Get Mortgage-Ready in Canada

Thinking about buying a home but worried your credit might hold you back? You’re not alone—and you’re not out of options. In this post, we break down the top 5 proven ways to improve bad credit in Canada, especially if you’re aiming to get approved for a mortgage in the next 3–4 years. These steps are practical, doable, and designed to help you build real momentum toward homeownership. Whether you’re in a rent-to-own or just looking at homeownership options, now is the time to start to rebuild or boost your score faster. Use this list as your personal roadmap. Bookmark it, print it out, and revisit it often as you check off each step—your future self (and your future mortgage approval) will thank you.

1. Pay All Bills on Time—Every Time

Your payment history makes up the largest part of your credit score. Even one missed payment can hurt. Set up auto-payments or reminders to make sure your bills—especially credit cards, loans, and utilities—are paid on time, every time.  Late payments eat away at your credit, good payment history will improve bad credit.

2. Lower Your Credit Card Balances

Keep your credit card balances below 30% of the limit—this is known as your credit utilization ratio, and lenders watch it closely. For example, if your limit is $10,000, try to keep your balance under $3,000. This shows you’re using credit responsibly.

3. Don’t Cancel Old Credit Accounts

Length of credit history matters. Keep older accounts open, even if you don’t use them often. They help demonstrate a longer, stable credit track record—which looks good to mortgage lenders.

4. Avoid Applying for New Credit Too Often

Every time you apply for credit, it creates a hard inquiry on your report, which can temporarily lower your score. Too many inquiries in a short time can raise red flags, especially if you’re preparing for a mortgage application.

5. Check Your Credit Report and Fix Errors to Improve Bad Credit

Request your free credit report from Equifax and TransUnion Canada, and review it for mistakes or outdated information. If you find an error—like a paid debt still showing as unpaid—dispute it right away to improve bad credit.

Bonus Tip: Work with a credit-savvy mortgage broker or rent-to-own specialist (like Clover Properties who have amazing third party partners) who can help you build a custom action plan to improve bad credit. Even small improvements can make a big difference in your approval odds and mortgage rate.