Credit cards in Canada: How to build credit


✔ Credit cards are more than just a way to pay for things. They also help to build your credit score in Canada.  

✔ A good credit score makes it easier to get access to credit when you need it.   

✔ Know what “to do” and “not to do” to avoid damaging your credit.

Your first credit card in Canada is more than just a convenient way to buy things, it’s also a way to start building your credit. As a new Canadian, having a good credit rating, known as a credit score, can make it easier for you to borrow money. 

A credit score ranges from 300 to 900 and they are what lenders, employers, and credit card providers use to determine if you are eligible to borrow. The higher, the better. The average is around 650. As you establish your financial presence in Canada, there are many ways your credit card can help you improve your credit score. 

How to build credit using your credit card 

Your credit card is something you use often so it's a fast way to show that you can manage money. Five ways to build a good credit score with your credit card are: 

  • Pay more than the minimum balance.
  • Make all your payments on time every month.
  • Try to use no more than 30 per cent of your total available credit. 
  • Keep your credit cards active. 
  • Maintain your credit cards for a long time to show you have a good track record. 

Learn more about how these habits lead to a better credit score, in this 4-minute read

Where to get your credit score
Canadian credit bureaus TransUnion and Equifax use financial and credit history to create a credit report which includes your 3-digit credit score. To get a copy of your report (free once a year) go online to either or

Things that can damage your credit 

Just like there are many ways credit cards build credit, there are habits that can also have a negative impact. Here are the most common ways to lower your credit score:  

Using too much credit

If you have multiple cards it’s important to manage them so that you owe no more than $30 for every $100 of available credit. It’s called your credit utilization rate (CUR) and combined should not exceed 30 per cent.

A lack of credit history in Canada

The length of time you’ve had credit in Canada matters because a long track record of paying your debts on time tells lenders you are a good credit risk.

The types of credit you have 

Most experts recommend only having two or three credit cards. What will help build your score is having a variety of credit, such as a credit card,  personal loan and a mortgage. 

Cancelling a credit card

When you cancel a credit card, your history with the lender gets erased, including your good track record. It also reduces your available credit so you may suddenly have a higher credit utilization rate (more than 30 per cent). 

How you manage your credit cards can have an effect on your credit score. To understand how your credit may be impacted, be sure to check your credit report to see where you are and if you need to make any improvements. 

We can help

If you looking to build your credit or need some financial relief, applying for an easyfinancial loan will not affect your credit score. We provide loans to new Canadians and accept applications from newcomers with no credit report. Reach out to your local easyfinancial branch or give us a call at 1-888-502-3279.

Disclaimer: This content is intended for informational purposes only and does not constitute financial advice on any subject matter.

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