Lack of financial literacy may be the culprit behind Canadians' debt binge. According to the MNP Consumer Debt Sentiment Survey that came out recently, 50 per cent of Canadians are concerned about their financial situation and nearly 4 in ten regret the debt they’ve taken on in the past year.

Add to that over 50 per cent say they are $200 or less per month away from not being able to meet all of their bills or debt obligations. To make matters worse, their credit rating has also likely taken a beating.

To be honest I like to use credit cards but I don’t like debt and I want a strong credit rating. There are times in your life where having a solid credit rating is fundamental will be instrumental to your financial success. Having a decent credit card rating could help you secure a job, get a loan and have access to credit in an emergency situation.

Here are a few tips improve your credit score:

  1. Begin by checking your credit score on an annual basis. Errors happen all the time and someone else’s mistake or poor financial management could impact your situation.
  2.  Always pay your bills on time and try to repay the full amount as quickly as possible.
  3. Don’t go over your credit limit
  4. Restrict the number of credit applications you make.

In Canada, credit scores range from 300 (just getting started) up to 900 points, which is the best score. According to TransUnion, 650 is the magic middle number - a score above 650 will likely qualify you for a standard loan while a score under 650 will likely bring difficulty in receiving new credit. In a perfect world you would have a credit score over 680 points and have established a credit history.

Sometimes you have a low score simply because you do not have a record of owing money and paying it back. Other influencing factors are whether you own or rent, how long you have been employed and the type of occupation you have. It doesn’t hurt to include a bank reference and your debt to equity ratio. The more positive data points, the higher the score. This is a good place to strive to be an overachiever.

Having a great credit foundation is a reflection of you and not only your ability but also your willingness to repay your outstanding debts.

If you are on the road to repairing your situation remember you and only you can get the job done. Don’t waste money by hiring someone to repair your credit. A credit bureau will not remove accurate negative information before the legal time period has expired.