Best Credit Cards for Building Your Credit in Canada

The best credit cards for building credit in Canada are usually cards that report your payment activity to the credit bureaus.

Secured credit cards are often a good starting point if you have bad credit or little credit history. Making payments on time can help you establish a stronger credit history over time.

KOHO Credit Builder

KOHO Credit Builder is designed to help Canadians establish or build their credit history through consistent monthly payments, without relying on a traditional credit card.

With KOHO Credit Builder, you can:

• +74 points average credit score increase seen using our credit building tools*

• Get approved without a hard credit check or minimum deposit

• Pay no interest on the line of credit

• Track your credit score and credit report directly in the KOHO app

• Build your credit history with monthly payments reported to the credit bureaus

What Type of Credit Card Is Best for Building Credit?

A secured credit card is often one of the easiest options for someone who is starting or rebuilding their credit.

You provide a security deposit before receiving the card. Your credit limit is usually based on that deposit.

You then use the card like a regular credit card. Your payment activity may be reported to the credit bureaus.

What Should You Look for in a Credit Building Card?

The most important thing is whether your payment activity is reported.

You should also check:

• Annual fees

• Interest rates

• Security deposit requirements

• Credit limits

• Eligibility requirements

• Whether payments are reported to Equifax or TransUnion

A card with easier approval is not necessarily the best choice if it has high fees.

Can You Build Credit Without Carrying a Balance?

Yes.

You do not need to carry a balance or pay interest to build credit.

You can make a small purchase with your card and pay the balance by the due date. This still creates payment activity without unnecessary interest charges.

How Should You Use a Credit Card to Build Credit?

Use the card for purchases you can already afford.

Then:

• Pay every bill on time

• Keep your balance low

• Avoid maxing out the card

• Avoid unnecessary credit applications

• Check your credit report regularly

Payment history is one of the most important parts of your credit profile.

How Much of Your Credit Limit Should You Use?

Try to keep your credit utilization low.

If your credit limit is $1,000, carrying a $900 balance means you are using 90% of your available credit.

A much lower balance can be better for your credit profile.

Paying your balance down before the statement date can also help keep the reported balance lower.

Can a Prepaid Card Build Credit?

A prepaid card usually does not build credit on its own.

You are spending money you already loaded onto the account. You are not borrowing against a credit limit.

If your goal is specifically to improve your credit history, look for a product that reports your payments to the credit bureaus.

What Is the Best Way to Start Building Credit?

Start with one manageable credit product.

Use it consistently. Make every payment on time.

You do not need several credit cards to build a strong credit history. One account managed responsibly over time can be a better starting point than applying for multiple cards at once.

*Based on users with a starting score of 450 or under and who used all of our credit building tools (i.e. Credit Building, Secured Credit Building) for 12+ months with on time payments. Credit building tools we offer are 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.