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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As you begin to build a life in Canada, it seems like you are constantly being asked questions about your credit rating.

If you are from another country that does not use credit reporting agencies or your established history does not transfer to the Canadian system, you will start from scratch.

Here’s a crash course on how to build your credit when you move to Canada.

Why you need to accumulate credit

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

Andrey_Popov / Shutterstock

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

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

Most of the time, you will need a credit score for:


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

How to build your credit

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

Now that you know your baseline, remember that there are five factors that go into calculating your credit score. While your payment history and debt level carry a lot of weight, there’s also how long you’ve had your credit accounts, what combination of credit you have, and how many new accounts you have.

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


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1. Credit cards

Credit cards in a wallet.

@MargJohnsonVA / Twenty20

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

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

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

If you don’t pay for some reason, the lender keeps your deposit. But once you’ve established your score and proven that you can be trusted, you can switch to an unsecured card and get your deposit back.


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2. Store cards

Attractive girl gives seller credit card and smiles while shopping in boutique

George Rudy / Shutterstock

Store cards are a great way to increase your credit. They are generally easier to obtain than regular credit cards and usually give you points or perks at your favorite retailers.

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

But, before you sign up, you’ll want to confirm the credit card company’s reports to the two major credit bureaus – some don’t.

3. Diversify for your debt

Woman holding a set of keys for a car with a clipboard in her hand

structuresxx / Shutterstock

After you’ve completed the first two steps, you’ll want to add another type of loan to your credit mix.

Most auto loan brokers report to the credit bureaus. Therefore, taking out a car loan can help you build up your credit. And because your loan is secured by the car, you will likely get better interest rates than with credit cards or personal loans.


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

4. Personal loans

Close-up of the hands of two people on a table, passing over papers.

qoppi / Shutterstock

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

Without a credit score, you will likely face a higher interest rate on your loan, which is why it is important to compare quotes to find the best rate.

And, while Canada’s booming real estate market can make it difficult to get a mortgage and buy a home, you still need to familiarize yourself with the steps in order to be ready for this important step. towards rooting.

This article was created by Wise Publishing. Wise is dedicated to providing information that helps readers navigate the complex landscape of personal finance. Wise only associates with brands that he trusts and that he believes can be of use to the reader. This article provides information only and should not be construed as advice. It is provided without warranty of any kind.



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Joan Ferguson

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