How to Build Credit in Canada

Whether you’re a young adult, an international student, a recent immigrant, or simply have not had a credit product before, you probably don’t have a credit history in Canada yet.

This can make it hard to qualify for a credit card, an apartment lease, or a car loan. And if you do manage to secure a loan or credit card, you’ll likely have to pay higher interest rates, which can cost you more money in the long run. 

No matter the reason for your lack of credit history, here are five steps you can take to start building it:

1. Open a bank account: It may not be credit-related, but opening a bank account should be the first step in starting your credit history. Many banks will interact with  one or both of Canada’s national credit bureaus when an individual opens an account.

2. Get a cellphone: Some cellphone providers don’t require a credit check before giving out an account, but they might report your payment history to the credit bureaus. Regularly paying off your monthly bill on time can help to build your credit history and credit scores. 

3. Ask your landlord to report your rent: Paying your rent monthly and reporting it to Canada’s credit bureaus is a smart way to build up your credit without taking on debt. Just make sure to pay your rent on time! There are services that help you and your landlord report this information to Canada’s credit bureaus.

4. Get a secured credit card: A secured credit card requires a monetary deposit. For example, you might put $300 of your own money on to the card, which you can then use to make purchases. 

5. Keep your credit card balance low: Use your credit card for groceries, monthly utility payments, and other small purchases. A good rule of thumb is to stay below 35 per cent of your credit limit. For example, if you have a $1,000 credit limit, try keeping your balance below $350. And make sure you pay at least the minimum payment, on time, every month.

Many banks offer credit cards and other financial products specifically for newcomers. Or, if you’re a post-secondary student, keep an eye out for credit card offers from reputable banks. 

Get more tips on how to improve your credit scores. You can also check your Equifax credit report and score for free to see how you’re building your credit. Checking your Equifax credit report is one of the best ways to spot signs of identity theft or fraud. With Equifax Complete^TM Premier, and Equifax Complete^TM Friends and Family, you’ll get credit monitoring and alerts of key changes to your credit report and score. And if your identity is stolen, our Identity Restoration Specialists will help you recover so you don’t have to worry.