With more Canadians hitting record levels when it comes to household debt, there’s probably no better time than now to tackle the topic of credit and how you can improve yours.

Credit scores are determined by a complex formula that looks at your income, your debt repayment history, your total approved credit limits, your credit usage levels. The information is crunched into a scoring system that assigns a number of between 300 and 900. This is known as your FICO score. The higher you are on the scale, the less risky you are to a lender. Generally, 680 and higher is good.

Mortgage and credit experts recommend getting a sneak peek at your credit rating yearly or every two years. The main reasons for this are to ensure that the information the credit bureau has is accurate and to make sure you’re not the victim of fraud. Credit rating agencies such as Equifax Canada and TransUnion Canada are typically used to determine scores.

Here’s how you can improve your credit score if you’ve been a little negligent paying your credit cards on time:

1. Pay your bills by their due date, even if it’s the minimum amount. Try setting up automatic payments so you don’t miss a date.
2. Keep your spending well below your credit limit. Even if you pay off your balance every month, maxing out your credit looks bad. Get your limit raised if you’re spending is too high.
3. Make sure you use your credit. An active history is what lenders look for so pull out your plastic every so often.
4. Don’t carry tons of credit cards. Most card holders are unaware that your credit is negatively affected every time a company checks your credit rating in order to issue you new credit.
5. Be wary of having too many credit lines. A number of loans may worry some lenders that you’re desperately seeking credit everywhere and that you won’t be able to pay the debt off.
6. People with exceptionally poor credit need to re-establish their credit by getting a secured credit card. These cards are similar to gift cards as you pay the credit company upfront and then make purchases on it until the balance depletes.

There are a number of online resources that assist Canadians with resolving their financial challenges, better managing their cash flow and improving their credit rating. Try BDO’s online quiz to determine your financial health.