You can start building credit from scratch with a credit card or a credit building loan. With on-time payments, responsible loan management and some patience, you’ll begin to establish a positive credit history.
Generally, building credit for the first time takes six months and at least one creditor reporting activity to Canada’s two credit bureaus. But remember, it’s important not to apply for numerous borrowing products in a short period of time, because too many applications – also known as hard inquiries – in a short time frame can damage your credit score. Try to space out credit applications by at least 6 months.
Once you have established credit, you can increase your credit score by continuing to demonstrate positive payment behaviours, keeping your credit utilization under 30% of available credit, managing a mix of borrowing products (credit card, car loan, personal loan, etc.) and monitoring your credit report regularly.