Best Credit Building Tools with Monthly Reporting to Bureaus

Your credit score is one of those numbers that quietly affects a lot of your life—whether you can get approved for an apartment or what interest rate you'll pay on a car loan. But here's the frustrating part: building good credit requires having credit in the first place.

The good news? There are tools specifically designed to help you build credit history.

The key is finding ones that actually report your payments to the credit bureaus every month. If it's not being reported, it's not helping your score.

Why monthly reporting to credit bureaus matters

First, let's talk about what credit bureaus actually do.

Credit bureaus (the main ones in Canada are Equifax and TransUnion) are companies that collect information about how you handle credit.

They track things like:

• Whether you pay your bills on time

• How much credit you're using

• How long you've had credit accounts

• What types of credit you have

KOHO Credit Building

If you're looking for a straightforward way to establish credit history, KOHO Credit Building is worth considering early in your journey.

How it works

KOHO's Credit Building gives you a dedicated tradeline (that's credit-speak for "an account that appears on your credit report"). The best part? There's no interest to worry about.

Here's what makes it simple:

• You make monthly payments

• Those payments get reported to Equifax every month

• Each on-time payment helps establish your credit history

• Over time, this can improve your credit score

Real results

KOHO members using Credit Building have seen their credit scores increase by an average of 31+ points in just 4 months¹.

Think about what 31 points could mean: better approval odds, lower interest rates, or finally qualifying for that apartment you wanted.

Free financial coaching

When you sign up for KOHO Credit Building, you also get access to an in-house Financial Coach. Having someone to answer your questions and guide you through the process makes building credit way less intimidating.

Who it's good for:

• People new to credit who need to establish a history

• Anyone recovering from past credit challenges

• Those who want a low-cost, low-stress way to improve their score

Other credit building tools to know about

Here are other options people use:

Secured Credit Cards

A secured credit card works like a regular credit card, but you put down a deposit first (usually $200-$500). That deposit becomes your credit limit.

How it helps: Your purchases and payments get reported to the credit bureaus monthly, just like a regular credit card.

The catch: You need money upfront for the deposit, and you'll want to make sure the card issuer actually reports to the bureaus (not all do).

Best for: People who want the flexibility of a credit card while building credit.

Rent Reporting Services

Some services will report your monthly rent payments to credit bureaus for a fee.

How it helps: Since you're paying rent anyway, you might as well get credit for it (literally).

The catch: Not all landlords or property management companies participate, and it usually costs extra. Also, rental payment history doesn't always carry as much weight as other types of credit.

Best for: Renters with long-term leases who consistently pay on time.

Authorized User Status

If someone with good credit (like a parent or partner) adds you as an authorized user on their credit card, their positive payment history can help your score.

How it helps: You benefit from their good credit behavior without being responsible for the payments.

The catch: You're trusting someone else completely. If they miss payments or max out the card, it can hurt your score too. Also, you're not building your own independent credit history.

Best for: People who have a trusted family member or partner with excellent credit willing to help.

What makes a good credit building tool?

When you're comparing options, here's what to look for:

✓ Confirmed Monthly Reporting

Make absolutely sure the tool reports to at least one major credit bureau (Equifax or TransUnion) every single month. If it doesn't report, it won't help.

✓ Affordable Costs

Building credit is a months-long process. Make sure the fees or interest rates are sustainable for your budget.

✓ No (or Low) Interest

Interest charges make everything more expensive and harder to manage.

✓ Simple to Understand

If you can't easily explain how the tool works, it might be too complicated. Straightforward tools are easier to stick with.

✓ Fits Your Current Situation

Don't choose a secured credit card if you can't afford the deposit. Don't pick a credit builder loan if you need access to cash now.

Tips for building credit successfully

No matter which tool you choose, these strategies will help you get the most out of it:

Pay On Time, Every Time

This is the golden rule of credit building. Payment history makes up the biggest chunk of your credit score (about 35%).

Set up automatic payments if possible, or calendar reminders a few days before due dates.

Start Small and Stay Consistent

You don't need to take on a lot of debt to build credit. Small, consistent payments work just as well—sometimes better—than large amounts.

A $10/month payment made on time for a year is more valuable than a $500 payment that's occasionally late.

Keep Your Credit Utilization Low

If you're using a credit card, try to keep your balance below 30% of your limit. So if your limit is $500, try to keep your balance under $150.

Lower utilization shows lenders you're not desperately relying on credit, which looks good on your report.

Don't Close Old Accounts (Usually)

The length of your credit history matters. If you have an old credit card or account in good standing, keep it open even if you're not using it much. It shows longevity.

Check Your Credit Report Regularly

You're entitled to free credit reports from Equifax and TransUnion. Check them at least once a year to:

• Make sure your payments are actually being reported

• Catch any errors or fraudulent accounts

• Track your progress

Seeing your score improve is genuinely motivating!

Be Patient

Credit building isn't instant. It typically takes 3-6 months of consistent on-time payments before you start seeing noticeable improvements in your score.

Don't get discouraged if nothing changes in the first month. You're building a track record, and that takes time.

How long does credit building take?

This is the question everyone wants answered, and the truth is: it varies.

If you're starting from scratch (no credit history at all), you can typically establish a basic credit score within 3-6 months of having an account that reports to the bureaus.

If you're recovering from negative marks (late payments, collections, etc.), improvement takes longer because those negative items stay on your report for years.

General timeline:

• 3-4 months: You might see your first score increases

• 6 months: Noticeable improvement with consistent on-time payments

• 12+ months: Solid credit history established

• 2+ years: Strong credit profile with staying power

Making your choice

Building credit doesn't have to be complicated or expensive. Find a tool that reports monthly to the bureaus and costs an amount you can comfortably afford.

For many people, that means starting with something like KOHO Credit Building: low monthly cost, confirmed reporting to Equifax, and straightforward enough that you can set it and (almost) forget it.

Your credit score is built one on-time payment at a time. Stay patient, stay consistent, and give yourself credit for taking steps to improve your financial future.

¹Based on users with a starting score of 500 or less and who signed up for credit building in October 2024. Credit Building is not a credit repair tool and does not guarantee an improvement in credit score. Credit scores are based on complex models involving a variety of factors. Consistent on-time payments help improve scores and missed or late payments may cause credit scores to decrease. Outcomes may vary among users.