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Here's How to Build Credit History From Zero in Canada

Here's How to Build Credit History From Zero in Canada

You will eventually need a credit card, a car loan, or some other type of lending if you have recently graduated from high school or college. As a credit history changes over time, that demands some preparation. Understanding how to establish credit can be beneficial to your money in many ways.


A credit history does not develop quickly. It is made up of payments that have been made throughout time and credit usage. We are talking about months and years to create a solid credit score, not days or weeks, because the average credit report is only updated every 30 days or so.


how credit score is calculated


What you can do is begin building a credit history right away even if you have no plans for a car loan or other type of lending for a while.


Here’s how to build credit history from nothing.


Get a Phone Contract in Your Own Name


Since a portion of the phone's cost is spread out over the course of a phone contract, it can be thought of as credit. It would be wise to purchase a phone in your own name if your parents have always paid for it.


You will pay a monthly fee, but it will also help establish your credit. Set up automatic payments, make sure to pay on time every time, and then go on.


Get a Credit Card


You are eligible to apply for a credit card if you are over 18. Using a credit card is by far the simplest approach to establish credit history, whether you choose to do so or not is entirely up to you. But there are a few guidelines.


Don't go overboard and immediately use your entire credit limit:


Make wise use of your credit card. Use it exclusively for normal purchases or for gas.


Credit cards are expensive to borrow money from, but if you pay off the entire sum each month, they become inexpensive. You should be fine if you get into the routine of only spending what you can afford and paying it off as soon as you get paid.


Set up automatic credit card paymentsIf you forget to pay off your credit card one month, having an automatic minimum payment set up will ensure you don’t miss a payment. Missing a payment does serious damage to a credit history so avoid it at all costs!


Advice for Renters


Some landlords are ready to include a mark in your credit file about consistent payments if you rent your home. Depending on how you pay your bills, utility companies may also create entries in their records. Both can aid in establishing a credit history, provided that you consistently make your payments on time.


A credit history is an overview of all of your past financial transactions. It takes time to develop and doesn't start until you start using credit. If you do it correctly, you will quickly establish a solid credit history and be prepared for when you require a car loan or other sort of borrowing.


Hopefully this article helps you understand how to build credit history. contact us here for more help!

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