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Written By
Corinna Frattini
Jul 22, 2025
•Building Credit
Starting your life in Canada? One of the most important financial steps you’ll take is building your credit history. A strong credit history in Canada opens doors; it helps you rent a home, get a phone plan, apply for a loan, or even qualify for a mortgage. In this guide, we’ll walk you through how to build a credit score in Canada, even if you’re starting from zero. Whether you’re wondering how to build your credit score in Canada for the first time or looking to improve it, this step-by-step approach will help you succeed.
To build credit in Canada, start with a secured credit card, pay your bills on time, keep your credit use low, and use rent reporting services. Most newcomers can build a strong credit history within 6–12 months of responsible credit use.
In Canada, your credit score is a three-digit number that represents how reliably you repay money. The score ranges from 300 to 900, with lenders viewing higher scores as less risk. Your credit report reveals your history of credit use and repayment, which influences your credit rating.
According to Borrowell (2023), “It typically takes 6–12 months of responsible credit use to build a strong enough credit history to qualify for most loans.” That’s why it’s important to start building credit in Canada as early as possible.
When you arrive in Canada, you may face a challenge: you need credit to get a car loan, rent an apartment, or apply for a mortgage, but you can’t access credit without a history.
Lenders use your credit history (from Equifax or TransUnion) to decide if you’re a responsible borrower. This record includes:
Without this history, newcomers may be unable to get loans or face high interest rates unless they have a co-signer or collateral. Don’t worry, you can start building credit right away.
Join us for an eye-opening session on how to build your financial future in Canada with confidence. This free webinar is hosted in partnership with Scotiabank, a trusted leader in newcomer banking. Together, we’ll guide you through how the Canadian banking system works and share free tools and strategies to help you plan, save, and invest wisely as a newcomer.
REGISTER FOR THE WEBINARHere are practical steps to begin building your credit score in Canada as a newcomer:
Your credit history is like a financial resume. It shows lenders whether you repay debts reliably. Your history begins once you open a credit account in Canada, usually a credit card or a loan.
You arrive with a blank slate, so the habits you form early are vital. Even without plans to buy a home right away, building credit is smart.
Building a credit history in Canada doesn’t happen overnight.
Many banks in Canada offer special newcomer packages that include credit-building tools. Some even pre-approve you for a secured credit card. Over time, responsible use can lead to unsecured cards with better terms. You can read more about how to get a credit card in Canada and avoid common mistakes.
Your credit score (between 300–900) is a summary of your credit history. Here’s why it matters:
🔍 Lenders use it to decide if you qualify for a loan or mortgage
🏠 Landlords often require it before renting a home
💼 Employers (especially in finance) may check it during the hiring process.
| CREDIT SCORE RANGE | RATING |
|---|---|
| 760+ | Excellent |
| 725 – 759 | Very good |
| 660 – 724 | Good |
| 560 – 659 | Fair (may qualify for loans) |
| 300 – 559 | Poor (needs improvement) |
Example: On a $1,000 card, don’t spend more than $300.
Ideally, pay in full, but at least the minimum to avoid penalties.
Interest starts immediately, often at a higher rate.
Source: Government of Canada, Financial Consumer Agency, 2024“The average interest rate on Canadian credit cards is around 20%, and even higher on cash advances.”
Too many accounts = higher risk in the eyes of lenders.
Missed payments hurt your score and stay on your report for years.
Use free tools like Borrowell or your bank’s credit monitoring service.
Renting your first home in Canada as a newcomer can be a challenge, especially if you don’t yet have a credit history. This is a common barrier: over 80% of Canadian landlords conduct credit checks as part of their tenant screening process. That means your credit score, and what’s in your credit report, can influence whether you get approved for a rental. Landlords often run credit checks, but there are ways around it:
💰 Show proof of savings to demonstrate rent affordability
📄 Provide employment letters or pay stubs to prove income
👥 Use references from employers or past landlords
👨👩👧 Get a co-signer with Canadian credit history (if possible).
Building credit takes time, expect 6+ months to show up on your report. Until then, focus on responsible financial behavior.
Cancel or transfer utilities when you move
Missed final bills can go to collections and hurt your score.
Read the fine print on contracts
Know the policy and any penalties for canceling internet, gym, and phone plans.
Avoid defaulting, communicate with creditors
If you lose your job or face hardship, contact lenders to arrange a payment plan.
Only borrow what you can afford
Living within your means is the best long-term credit strategy.
Your credit report includes:
Collection items stay for 6 years, legal judgments for 10 years, so protect your report early.
Building credit in Canada may seem overwhelming at first, but every payment and responsible decision counts. Whether you’re using a secured credit card, signing up for rent reporting, or simply paying your bills on time, each step helps you move forward.
The key is to start early and keep your long-term goals in mind. Now you have the tools to build credit and your credit score in Canada the right way! Stay informed, be patient, and you’ll build a strong credit history that supports your future in Canada.
A. You can start building credit within within 6 – 12 months of using a credit card responsibly.
A. Yes! Rent reporting, utility bills, and even some mobile phone plans can help if reported to credit bureaus.
A: Generally, no. Canadian credit history starts fresh when you arrive.
A. Your credit history is your record of borrowing and repayment activity, while your credit score is a numeric summary of that history.
WRITTEN BY
Corinna Frattini
Senior Editor, Prepare for Canada
Corinna Frattini is the Senior Editor and Content Director for Prepare for Canada. She contributes articles to help newcomers achieve their goals in key areas related to living, working, and settling in Canada. With an extensive background in human resources and leadership development, her articles focus on what Canadian employers seek and how newcomers can continue their careers in Canada.
© Prepare for Canada 2025
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