If you’re trying to qualify for a mortgage in Alberta, one of the biggest factors that can impact your approval (and your interest rate) is your credit score.
Most people know the basics, like making payments on time. That matters, but there’s another credit score tip that can make a huge difference quickly.
The quickest and easiest way to increase your credit score (without changing your payment history) is to manage your credit utilization.
As a Lethbridge mortgage broker, I see credit utilization issues all the time, especially when people are getting ready to buy a home in Southern Alberta.
What Is Credit Utilization?
Credit utilization is the percentage of your available revolving credit that you are currently using.
This applies mainly to revolving accounts like:
- Credit cards
- Lines of credit
- Some retail credit cards
It does not apply in the same way to installment loans like car loans.
Example of Credit Utilization
If you have a credit card with a $1,000 limit and your balance is $700, your utilization is:
$700 ÷ $1,000 = 70% utilization
That’s considered high, and it can reduce your credit score.
Why Credit Utilization Impacts Your Credit Score So Much
Even if you always pay your credit card on time, lenders still see high utilization as a risk signal.
If your limits are maxed out or close to maxed out, the credit bureaus often interpret that as financial stress.
When I’m helping clients qualify for a mortgage, I’ll often hear:
“My credit should be awesome. I barely have any debt.”
But then we look at their credit profile and see they have a low credit limit, and it’s being used heavily every month.
The Credit Score Rule: Try Not to Use More Than 50% of Your Limit
A simple guideline that works for most people is this:
✅ Keep your revolving utilization under 50%
Even better: keep it under 30% when possible
So if you have:
- $2,000 total credit limit → try to stay under $1,000
- $10,000 total credit limit → try to stay under $5,000
This is one of the easiest ways to improve your credit score without doing anything complicated.
Common Mistake I See in Alberta: Small Limits Get Maxed Out
A $1,000 credit card limit might sound “safe” because it feels small and manageable.
But in today’s world, it’s extremely easy to spend up to that limit on everyday expenses like:
- groceries
- fuel
- daycare
- subscriptions
- dining out
- travel costs
- home repairs
That’s why people with small limits often end up showing 70%–100% utilization, even if they’re financially responsible.
Quick Credit Score Hack: Increase Your Credit Limit (And Keep Spending the Same)
This is where the credit score strategy feels backward.
One of the easiest ways to improve your utilization is to request a credit limit increase from your bank or credit card provider.
If your limit goes up but your spending stays the same, your utilization drops automatically.
Example
If you normally spend $800/month:
- $800 on a $1,000 limit = 80% utilization
- $800 on a $5,000 limit = 16% utilization
Same spending. Totally different impact on your score.
This can be one of the fastest and easiest ways to “manipulate” your credit score higher (in a legit way).
Does Asking for a Higher Limit Hurt Your Credit Score?
Sometimes a lender may do a credit check when you request a higher limit, and that can temporarily cause a small decrease.
However, if the increase is approved, the long-term benefit of lower utilization can outweigh the short-term dip.
If you are planning to buy a home soon, it’s best to speak with a mortgage professional first so the timing makes sense.
As an Alberta mortgage broker, I can tell you when to do this and when to avoid making changes.
Mortgage Tip: Credit Utilization Matters Even If You Pay Your Card Off
Here’s the part many people don’t realize:
Even if you pay your credit card off every month, your statement balance may still report a higher utilization before your payment hits.
That’s why keeping your usage low throughout the month can help your score more than just paying it down at the end.
Need Help Getting Mortgage-Ready in Lethbridge or Southern Alberta?
If you’re planning to buy a home, refinance, or renew your mortgage, your credit score can affect:
- your interest rate
- how much you qualify for
- your approval chances
- mortgage insurance requirements
If you want a quick review of where you stand, I’m happy to help.
I’m a Lethbridge mortgage broker working with clients across Southern Alberta and throughout Alberta, and I can help you create a simple plan to get your credit in the best shape possible.
Reach out anytime and I’ll walk you through it.
Dillan Kelly
Mortgage Broker
Dominion Lending Centres Mortgage Excellence
Cell: 403-894-5818
Email: dillan@dlcme.ca
