Buying a home is one of the most significant financial decisions you'll make in your lifetime, and your credit score plays a crucial role in determining how much you can borrow, as well as the interest rate you'll be offered. A healthy credit score can open doors to competitive mortgage rates, making your dream home more affordable. If you're looking to improve your credit score to increase your borrowing power, here are actionable steps to get you on the right track.

1. Understand Your Credit Score

First things first: obtain your credit report from one of Canada's credit bureaus - Equifax or TransUnion. By law, you're entitled to one free report per year from each bureau. Reviewing your credit report will not only give you insight into your current score but also highlight any errors or discrepancies that could be unfairly lowering your score.

2. Pay Bills on Time

Your payment history is a significant factor in your credit score. Late payments can have a detrimental effect, so it's crucial to pay all your bills on time. Setting up automatic payments for your bills can help ensure you never miss a due date.

3. Reduce Your Debt

High levels of debt, particularly on credit cards, can negatively impact your credit score. Work on paying down your balances, starting with the accounts that carry the highest interest rates. Aim to keep your credit utilization ratio — the amount you owe divided by your credit limit — below 30%.

4. Don't Close Old Credit Accounts

The length of your credit history contributes to your credit score. Keeping old accounts open can help, as long as they're not costing you money in annual fees. This demonstrates a longer credit history and financial stability to lenders.

5. Limit New Credit Applications

Each time you apply for credit, a hard inquiry is made, which can lower your score. Limit the number of new credit applications you make. When shopping for loans, try to do so within a short period, as multiple inquiries for the same type of loan are often treated as a single inquiry when done close together.

6. Diversify Your Credit

Having a mix of different types of credit (credit card, installment loans like for a car, and mortgages) can positively impact your score. However, don't open new accounts just to have a better credit mix; it's not that significant a factor.

7. Consider a Secured Credit Card

If you're struggling to get approved for traditional credit cards, a secured credit card can be a good option. Secured cards require a deposit that serves as your credit limit. Using and regularly paying off a secured card can help rebuild your credit score.

8. Be Patient

Improving your credit score is a marathon, not a sprint. Positive changes in your financial habits will lead to improvements in your score over time. Stay disciplined and focused on your financial goals.

9. Seek Professional Help

If you're overwhelmed or unsure where to start, consider consulting with a financial advisor or a credit counselling service. They can provide personalized advice and strategies to help you improve your credit score.

Boosting your credit score is a journey that requires consistent effort. By adopting these strategies, you're not just working towards a higher credit score; you're paving the way for better mortgage options and making your dream home more attainable. Stay focused on your goals, and you'll see your credit—and your home buying potential—rise.