Credit Protection Strategies: How to Protect Your Credit while Managing Debt

From groceries and electricity, to mortgage and rental payments, you’ve likely noticed that many of your everyday essentials are increasingly more expensive. 

You’re not alone. A recent online survey* of 1,564 Canadians, found nearly half of respondents are worried about paying monthly bills and one-third are thinking about getting a second or third job to pay the bills. 

One of the most worrying findings is that 23 per cent of the Canadians surveyed have missed a bill payment this year because they didn’t have the money. 

While missing one bill payment might not seem like a big deal, it can negatively affect your credit scores. And a lower credit score can affect your chances of qualifying for a new loan or a lower interest rate, which means you can end up paying more for the same amount of debt. 

There are ways to manage your debt, while still protecting your credit score. 

1. Look for savings in your budget. You can use a budget planner to track your monthly income and expenses. Look for ways to cut back on non-essential spending, and swap out more expensive items for bargains. That might mean cancelling a streaming service you don’t use or shopping at a less expensive grocery store. Put any savings toward your debts.

2. Delay big purchases. If you need to borrow money, don’t borrow more than you need. Mock up a new budget with the minimum monthly payments to ensure you can afford the additional debt. 

3. Pay your minimum payments on time, every time, and for every bill. Pay at least the minimum payment shown on your statement by the due date. If you don’t, the creditor may report a late payment to one or both of Canada’s national credit bureaus. Late payments can stay on your credit reports for up to six years and can negatively affect your credit scores.

4. If you can, pay more than the minimum payment on credit cards and lines of credit. This can help you pay off your debts faster — so you pay less in interest — and can help improve your credit scores. This also helps lower your credit utilization ratio, a factor used when calculating your credit score.

5. Check your credit reports regularly. Check your credit reports to ensure your personal information is correct. If you find information you believe is inaccurate or incomplete, contact the lender or creditor, and the credit reporting agency. Remember — checking your own credit reports or credit scores won’t affect them.  

6. Consider credit counselling. Credit counselling can help you review your finances, solve debt problems, and understand how to manage your budget and rebuild credit. 

You can check your Equifax credit report for free. When you buyEquifax Complete^TM Premier and Equifax Complete^TM Friends and Family, you'll get credit monitoring and alerts of key changes to your Equifax credit score and report. These alerts can help you stay on top of changes to your credit and spot signs of identity fraud faster. If someone steals your identity, our Identity Restoration Specialists will work hard on your behalf to help you recover.

*An online survey of 1,564 Canadians was completed between September 15-18, 2023, using Leger’s online panel. The margin of error for this study was +/-2.5 per cent, 19 times out of 20.