Marshall Homes


How to Build Your Credit 101

Credit report with score on a desk

Maybe you’re a student looking to get started working your way up the financial ladder or perhaps you’re newly arrived to Canada and want to build up credit quickly. Regardless of the situation, your route to credit is the same – good financial habits displayed over a significant timeframe. In Canada, the two credit reporting companies are Equifax and TransUnion and your major financial transactions will end up on their radar and put on reports that will display your personal credit score. The higher the score, the better the deal you’ll get on future credit. In order to get a good credit score you’ll have to earn it. Here’s how.

Get Started

If you don’t have a bank account then opening one is your first step. Don’t exceed your bank limit and don’t write cheques that bounce. Getting a full blown credit card might be difficult initially – though if you’re a student there are student cards available that should definitely be obtained. Start with a department store credit account as they can be easier to get. You can also apply for a secured card which limits the money to what you can put down. Once you have established a small bit of credit, getting a major credit card should be easier.

Pay your Bills on Time and Regularly

If possible pay your credit card bills every month in full – this will also prevent you from having to pay interest. If that’s not possible for whatever reason, you should always pay your monthly minimum or it will reflect negatively on your credit. That said, try to use the credit card somewhat regularly so you have a history of taking on and paying off debt.

Know your Real Limit

Understand that just because your credit card says you can owe that much doesn’t mean you should. Your credit score will increase when you actually pay off the lenders you owe so don’t put yourself in a position where that can’t happen.

Don’t Ignore Financial Issues

If you do fall into debt don’t bury your head in the sand and try to wait the problem out. It will not help. Do seek advice from people who can help you out. A consolidation loan may be able to be granted that can pay off your debts and let you pay what you owe at a lower interest rate. If you end up getting so into debt you start getting calls from debt collectors, it can be a serious blow to your credit.

Spend responsibly and pay back what you owe. Over time that diligence will find its way on to your credit report and accompanying score. If you feel like your credit is good enough to consider purchasing your own brand new home register for updates and we’ll send you the latest information based on your preferences for house type, size, and price range.

Filed under: First Time Home Buyer by Marshall Homes