Rebuilding Credit

By Christi Posner

Last week I had an a-ha moment when I pulled my credit report and discovered that my credit score was considered “excellent” for the first time in my life. But the real a-ha moment came when I looked at it and thought, “so now what?” I realized that having a high credit score was not all it was cracked up to be. Now that I have it, I don’t want to use it!

However, I also talked about why building a solid credit score is important to me. If you also reflected and decided that yes, a high credit score is important to you, then follow along. I am going to share my journey with you.

Once upon a time, my credit history looked much less ideal than it does today. My credit report consisted of late and missed payments, a collection item, and a very poor credit score. I’d have never gotten the mortgage, job and vehicle financing I have today with the low credit score I used to have. So if you’re curious, here’s how I got to where I am today.

Like most of us, I started off with very little knowledge about credit. Through the years, life threw some hard lessons my way. I educated myself about the credit scoring system, I asked questions and I worked hard to push that number up.

Here are some of the lessons I learned while trying to rebuild my credit:

  • Make All Payments On Time – At age 20 I was declined for an increase in my Student Line of Credit because “there were two payments in the last year that were over 30 days late.” “SO?!” I thought. “I ended up making the payments, I just made them later!” I left that office in tears. At that time I didn’t understand the importance of making the minimum payments on or before the due date. But from then on, I never missed a payment again.
  • Deal with Collection Items – Or better yet, avoid them in the first place! Around the same age my credit score almost cost me a job.  I had been offered a position with a major credit card company but was told that there was a collection item on my credit report that I had to take care of first. I had no idea I had a debt in collections! Luckily it was only an $88 library fine, but who knew how long that collection item had been weighing down my credit score!
  • Don’t Apply for Unnecessary Credit – While working for two credit card companies and a credit union I was offered very low interest rate credit cards. I would apply for every offer because, well, why not? Did you know that every time you apply for credit, you pull your score lower, regardless if you get approved or not? At that time, I sure didn’t. By making the decision to just pay down the debts that I had and not apply for any additional products, I stopped negatively impacting my credit score.
  • Reduce Total Debt Owing – This is the main reason my credit score has improved. Once I created a budget, gave myself an allowance, established emergency savings, and created a solid debt reduction plan, I was able to pay down my debt once and for all. The less debt I owed, the higher my credit score went.
  • Leave Credit Limits Alone – While repaying my debt, I wanted so badly to reduce the limit on my credit card every time I paid off $1000. That way, I couldn’t re-spend the money. However, I learned that your credit score reflects the total debt owing in comparison to your total credit limits. The idea is to keep reducing this percentage and get under the 75% mark. I left my credit limits alone, and my credit score continued to go up.

I could go on and on about how the credit scoring system works, and factors that improved my credit score, but these were the main contributors to my success. And the lessons still keep coming, like the one I learned today. You know how people say a boyfriend/girlfriend/job opportunity will come your way as soon as you stop looking for one? Well as I looked back on my journey, I realized that my credit score started going up the moment I stopped focusing on the credit score itself. Once I pushed the number aside and started focusing on sticking to my budget and seriously paying down my debt, my credit score took care of itself.

Don’t focus on the score, focus on the journey. Take control of your financial life, and your credit score will follow suit.

What were you most surprised to learn about the credit scoring system? I was most surprised by the “Statute of Limitations” – the number of years that your credit history, good or bad, will show on your credit report. In most provinces it is 6 years! Please share what you know down below, to help others learn too!

– Christi (@ChristiPosner)


Originally posted on

Christi Posner is a Credit Counsellor for the Credit Counselling Society, a non-profit, charitable organization. Born and raised in Winnipeg, Christi is a newlywed, a new homeowner, and with the exception of car loans and a mortgage, she is newly debt-free. Her goal is not merely to survive, but to financially thrive; and to do so with some passion, empathy, humour, and a smile.