Credit Repair 101: How to Fix Bad Credit in Canada

Bad credit feels heavy, but it’s not permanent.

In Canada, your credit score is always changing based on what you do next—so with a bit of structure, you can move from “stressed” to “on track” over time.

Get Started With KOHO Everything Plan

Repairing credit is much easier when your day-to-day money is organized and your savings are growing.

With the KOHO Everything Plan, you get:

• Grow your savings with 3.5% interest, one of the highest rates in Canada

• Earn a 2% cash back rate on groceries, eating, drinking, and transportation and 0.5% cash back on everything else

• Add Credit Building for $10/month, it's an affordable way to build your credit history

• There are no foreign exchange fees, so you save on international purchases and travel

• Unlimited transactions and free e-transfers

• No minimum balance required, ever

1. Get Your Credit Reports and Know What You’re Fixing

You can’t fix what you haven’t seen.

• Get your full credit report from both major bureaus (Equifax and TransUnion).

• Look for: late payments, collections, maxed-out cards, and any accounts you don’t recognize.

Highlight what’s wrong (errors) vs what’s accurate but ugly (real late payments, high balances).

2. Dispute Errors and Fraud

If you see:

• Accounts you never opened

• Wrong limits or balances

• Late payments that shouldn’t be there

You can dispute them with the bureaus and, if needed, the lender. Cleaning up mistakes won’t magically give you a perfect score, but it can remove unfair damage.

3. Stop the Bleeding: Never Miss Another Payment

Going forward, on time payments are non-negotiable.

• Set up automatic payments for at least the minimum on credit cards and loans.

• Use KOHO to separate money for bills so it’s always there when the payment hits.

• If you can’t afford full payments, call your lender and ask about reduced payments or hardship options

Payment history is one of the biggest factors in your score. Every on time month helps.

4. Lower Your Credit Utilization

Your credit utilization is how much of your available credit you’re using. High utilization (like 80–100% of your limits) drags your score down.

Goals:

• Aim to keep balances well under 30% of your limits if you can.

• Prioritize paying down high-interest and maxed out cards first.

• Avoid adding new high-interest debt while you’re trying to repair things.

5. Add Positive History (Without Over Borrowing)

Once things are stable, you can start adding more good data to your file:

• Consider a credit building program.

• Use any existing credit card lightly and pay it in full every month.

• Avoid opening lots of new accounts at once.

Think “small, boring, on-time” rather than big flashy limits.

6. Be Patient and Consistent

Credit repair takes months, not days.

The pattern that wins is simple:

• Pay everything on time

• Keep balances as low as you can

• Avoid unnecessary new debt

Over time, your report starts to tell a new story—and your score follows.

^{*Based on users with a starting score of 500 or less and who signed up for credit building in September 2024. Credit Building is not a credit repair tool and does not guarantee an improvement in credit score. Credit scores are based on complex models involving a variety of factors. Consistent on-time payments help improve scores and missed or late payments may cause credit scores to decrease. Outcomes may vary among users.}