Preparing to buy a home is an exciting milestone—but before you start house hunting, there’s one critical number you’ll want to improve: your credit score. A higher credit score not only increases your chances of being approved for a mortgage, but also helps you access lower rates, better mortgage terms, and more competitive mortgage products.
If your credit needs some work before you apply, don’t worry—improvement is possible. Here are five practical, proven ways to boost your credit score before applying for a mortgage in Alberta or beyond.
1. Pay Every Bill on Time—Without Exception
Your payment history is the single most important factor in your credit score, making up roughly 35% of the total. Even one late payment can knock your score down significantly—and may stay on your report for years.
To stay on track:
- Set up automatic payments or reminders through your bank.
- Review your account due dates and ensure nothing slips through the cracks.
- If you’re struggling to make payments, contact creditors proactively to negotiate payment plans or deferrals.
Consistently paying bills on time demonstrates reliability to mortgage lenders and improves your chances of being approved for a more favorable mortgage product.
2. Lower Your Credit Utilization Ratio
Your credit utilization ratio is the amount of credit you’re using compared to your total available limit. This accounts for roughly 30% of your credit score. The lower your utilization, the better.
Here’s how to bring it down:
- Try to keep balances below 30% of each credit card’s limit.
- Make multiple small payments throughout the month (known as “micropayments”).
- Ask for a credit limit increase—but only if you’re confident you won’t increase your spending as a result.
If your utilization is too high, it could suggest you’re overextended, which can be a red flag when applying for a mortgage. Managing this number will not only help boost your score but also reduce your monthly payments in the long term.
3. Avoid Opening or Closing Credit Accounts
Every time you apply for new credit—like a personal loan or store card—a hard inquiry is added to your credit report. While a few inquiries won’t make a big impact, several within a short time can lower your score.
Equally important is your credit history length. Closing old accounts, especially your oldest ones, can shorten your average credit age and reduce your score.
Here’s what to do:
- Avoid applying for new credit in the 3–6 months before your mortgage application.
- Keep older accounts open, even if you don’t use them often—just set reminders to use them occasionally and pay them off.
- Don’t co-sign loans unless absolutely necessary; the debt will appear on your report.
By maintaining a stable credit profile, you’ll demonstrate to financial institutions that you’re low-risk and responsible.
4. Diversify Your Credit Mix—but Do So Carefully
Lenders like to see that you can manage multiple types of credit, such as:
- Revolving credit (credit cards)
- Installment loans (auto loans, student loans)
- Lines of credit or personal loans
If your file is thin or mostly consists of one type of credit, adding a new account (like a secured credit card) could help—but timing is critical. Doing so too close to your mortgage pre-approval may cause more harm than good.
Instead, consider:
- Using existing accounts wisely to show a good payment track record.
- Applying for a small credit-builder loan if you have time (6+ months) before buying a home.
- Avoiding unnecessary “buy now, pay later” products which can be hard to track and may create surprise debt.
Lenders want to see that you’re comfortable managing various obligations—especially before extending a six-figure mortgage amount.
5. Review Your Credit Report and Correct Errors
Even small mistakes on your credit report can hurt your score—and they’re more common than you might think. From incorrect payment histories to accounts you didn’t open, errors should be corrected as soon as possible.
To check your report:
- Request your credit file from Equifax Canada and TransUnion Canada—you’re entitled to one free report per year from each bureau.
- Review account balances, payment history, open accounts, and hard inquiries.
- Dispute any errors directly through the credit bureau and provide supporting documentation.
Fixing errors could give your score a fast boost—something that can make a huge difference when lenders assess your file during the mortgage pre-approval process.
Why It All Matters
In Canada, a credit score of 680 or higher is typically required to qualify for a standard mortgage with most mortgage lenders. While some alternative lenders will accept lower scores, a higher score gives you access to:
- More mortgage products
- Better mortgage terms
- Lower interest rates
- Greater purchasing power and flexibility
A stronger credit profile can also help you qualify for a higher purchase price or reduce your closing costs by securing more favorable terms.
Bonus Tip: Plan Ahead and Get Expert Help
Improving your credit score isn’t an overnight fix—it can take three to six months or more to see results. The earlier you start, the better.
Use a mortgage calculator to estimate what you could qualify for with your target score. Then, consult a trusted mortgage broker or visit a mortgage centre for a pre-approval review. These professionals can help you assess your financial situation, make personalized recommendations, and even connect you with credit repair resources if needed.
Many real estate agents also work closely with brokers to help first-time home buyers navigate both the property and financing sides of the process. Don’t be afraid to ask questions—it could save you thousands over the life of your loan.
Final Thoughts
Boosting your credit score before applying for a mortgage is one of the smartest financial moves you can make. It sets the stage for stronger offers, more favorable terms, and greater long-term affordability. By paying bills on time, reducing your credit utilization, avoiding unnecessary credit changes, maintaining a healthy credit mix, and cleaning up your credit report, you’ll be in the best position to buy a home with confidence.
Remember, whether you’re a first-time home buyer or getting back into the market, improving your credit is an investment in your financial future—and one that lenders reward. Start early, be consistent, and don’t hesitate to work with professionals to guide you every step of the way.