How to Build Credit in Canada

Establishing good credit is important to many Canadians. Many factors can affect your credit status, such as, paying bills on time, credit card balances, etc. Many people are faced with trying to build their credit from a lack of credit or trying to increase their credit score. Even if you are lacking credit, there are several steps that you can take to build it.

Instructions

1

Check a current copy of your credit report. Order a copy of your report from the two major reporting agencies in Canada, Equifax and TransUnion. Review your report to determine your credit status. This will help you better prepare for building your credit.

2

Research accounts at several banks, such as the Bank of Montreal or Bank of Nova Scotia in Canada. Inquire about any fees associated with the account. Many banks will waive any setup fees for new members. In addition, you may also qualify for loans and low interest credit cards designated for new members.

3

Open a savings account and begin investing a small amount of money each month. If you can prove your ability to diligently save money, the bank may be more willing to extend a loan or credit card to you.

4

Apply for an account with a major department store, such as, Hudson Bay Company, the largest department store in Canada. Make timely payments and they will be reported to the credit reporting agency. You will begin to establish new credit as you continue to make payments. Being responsible with a department store card may help you get approved for a major credit card.

5

Obtain a secured Canadian credit card. Consider the secured RBC Royal Bank credit card which is extended to those with little or no credit history. You are required to deposit money into an account and this amount will determine your credit limit. For example, if you deposit $500.00 into the account, your spending limit will be $500.00. This is a great way to establish a new credit history since your payments are reported to the credit reporting agency.

6

Ask a friend or family to cosign for you. If you know someone who has good credit, a creditor may extend credit to you based off of a cosigner's credit.