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Moving to Canada? Here are 4 ways to start building your credit score

How to go from “invisible credit” to “invincible credit”

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When you start building a life in Canada, it seems like you are constantly being asked about your credit score.

If you are from another country that does not use credit reporting offices or if your consolidated history is not transferred to the Canadian system, you will start over.

Here is a crash course on how to build your credit while settling in Canada.

Why you should build credit

Person using laptop to check their credit score with phone and glasses next to the computer.

Andrey_Popov / Shutterstock

In Canada, lenders report the relevant details of your credit accounts (whether you pay on time, how much balance you carry, and more) to two major credit bureaus: Equifax and TransUnion.

From there, the credit bureaus will give you a three-digit score between 300 and 900.

You usually need a credit score to:


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  • Rent an apartment or buy a house.
  • Get credit cards.
  • Take out a private student loan.
  • To apply.
  • Download the utilities to connect to your home.
  • Get a cell phone.

How to increase your credit

First of all, you want to get an idea of ​​how far you need to go to qualify for a better interest rate or become a better borrower. Fortunately, you can check your score online for free.

Now that you know your baseline, remember that there are five factors that come into play when calculating your credit score. While your payment history and level of debt carry a lot of weight, there is also how long you have your credit accounts for, what credit mix you carry, and how many new accounts you have.

With that in mind, here are five of the best ways to build your credit.


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1. Credit Cards

Credit cards in a wallet.

@MargJohnsonVA / Twenty20

You need to have a decent credit score to qualify for most credit cards, especially those with low fees or good benefits.

But if you’ve never had the opportunity to accumulate credit, how do you qualify for a card? A secured credit card is one way to build up credit if you don’t have a credit score.

A secured credit card is required: that you pay a cash deposit that acts as a guarantee. The amount you deposit is normally used to set the total amount you can borrow at any given time. So, if you deposit $ 1,000, that’s the maximum debt you can accumulate.

If for some reason you don’t pay, the lender will keep your deposit. But once you’ve built up your score and proven you can trust it, you can switch to an unsecured card and get your deposit back.


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2. Save the cards

Attractive girl gives credit card to salesman and smiles while shopping in boutique

George Rudy / Shutterstock

Store cards are a great way to build up credit. They are usually easier to qualify than regular credit cards and generally offer you points or benefits at your favorite retailers.

Just make sure you keep your balance low and pay your card every month. When you use your card responsibly, the retailer reports it to the credit bureaus.

But before signing up, confirm the credit card company reports to both major credit bureaus, some not.

3. Diversify for your debt

Woman holding bunch of car keys with clipboard in hand

structuresxx / Shutterstock

After completing the first two steps, we recommend adding another type of loan to your credit mix.

Most auto loan dealers report to credit bureaus, so taking out an auto loan can help you build your credit. And because your loan is secured by the car, you are likely to get better interest rates than credit cards or personal loans.


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When you make payments, your lender will report your responsible behavior to the credit bureaus, reinforcing your score.

4. Personal loans

Close-up of two people's hands on a table, moving over sheets.

qoppi / Shutterstock

A personal loan is another way to build your credit score. You borrow a certain amount and repay it in fixed payments over a certain period of time, usually monthly.

Without a credit score, you will likely face a higher interest rate on your loan, so it’s important: Compare quotes to find the best price.

And while Canada’s torrid real estate market can make it difficult to get a mortgage and buy a home, you still need to familiarize yourself with the steps so you’re ready to take this important step towards planting roots.

This article was created by Wise Publishing. Wise is committed to providing information that helps readers navigate the complex landscape of personal finance. Wise only works with brands that it trusts and that it believes will be useful to the reader. This article provides information only and should not be construed as advice. It is supplied without any kind of guarantee.