Best Credit Building Programs in Canada

Looking to build your credit in Canada? Good credit is essential - it helps you get approved for loans, credit cards, and even rental applications.

Here's a straightforward guide to the best credit-building programs currently available.

1. KOHO

• Cost: $5-10 monthly (depends on your account type)

• How it works: Open a KOHO account and sign up through the app

• Benefits:

  • No hard credit check

  • No minimum deposit

  • Reports to major credit bureaus

  • Free credit score tracking

  • Automated payments to prevent missed payments

  • KOHO members have seen their credit scores go up by an average of 35+ points in just 4 months*

  • Cancel anytime

*Based on customers with credit score below 500, who signed up for credit building during September 2024. This is a representation of individual experiences and are not intended to guarantee a similar outcome. Credit Building is not a credit repair tool and does not guarantee an improvement in credit score. Credit scores are based on a variety of factors and outcomes may vary among users

2. Spring Financial

• Cost: $55 every two weeks

• Benefits:

  • Guaranteed approval regardless of credit score

  • Reports to both Equifax and TransUnion

  • Builds savings ($750 over 12 months)

  • Access to savings anytime

  • Guaranteed access to Evergreen Loan after completion

3. Borrowell

• Cost: $10, $30, or $50 monthly (three-year term)

• Benefits:

  • No hard credit check

  • Automated payments

  • Get back $240-$1,440 at end of term

  • Average 41-point score increase within five months

• Note: Requires at least six months of credit history and two existing accounts with Equifax

4. Fairstone

• Options:

  • Secured loans: $5,000-$60,000 (36-120 months)

  • Unsecured loans: $500-$25,000 (6-60 months)

• Benefits:

  • Immediate access to funds

  • Allows co-signers

  • Autopay option

  • Loan insurance available

• Note: Minimum 550 credit score required

Secured credit cards for credit building

Secured credit cards are a practical first step toward building credit when you have limited or damaged credit history. Unlike traditional credit cards, these require a security deposit that typically sets your credit limit.

Here's how the top options in Canada stack up:

1. KOHO Essentials Prepaid Mastercard

• Rewards: 1% cash back on groceries, transportation, and dining

• Features:

  • 2.5% interest on your entire balance

  • Instant e-Transfers

  • Unlimited Transactions

  • Up to 6.5% extra cash back at selected merchants

  • Free Credit Score

2. Neo Secured Credit

• Cost: $5 monthly

• Minimum deposit: $50

• Rewards:

  • Up to 4% cash back on gas and groceries

  • Up to 1% cash back on other purchases

  • Extra 5% at Neo partners

• Interest: 19.99%-24.99%

3. Secured Tims® Mastercard

• Minimum deposit: $50

• Annual fee: $0

• Rewards:

  • 12 points per $1 at Tim Hortons

  • 2 points per $1 on groceries, gas, and transit

  • 1 point per $4 on everything else

• Interest: 20.99%-25.99%

4. Capital One Guaranteed Cards

• Annual fee: $59

• Interest rate: 21.9%

• Secured option: $75-$300 deposit

5. Home Trust Secured Visa Card

• Minimum deposit: $500

• Annual fee: $0 (or $59 for lower interest)

• Interest: 19.99% (or 14.90% with annual fee)

How to build credit quickly

The fastest ways to build credit:

1. Lower your credit utilization - Pay down existing balances

2. Make all payments on time - Payment history is the biggest factor

3. Pay more than minimums - Reduces debt faster

Effective debt repayment methods

Avalanche Method:

• Pay highest-interest debt first

• Save money on interest long-term

Snowball Method:

• Pay smallest debts first

• Creates motivation through quick wins

Debt Consolidation:

• Combine multiple debts into one

• Potentially lower interest rates

• Fewer payment dates to track

Common credit-building mistakes

• Applying for too many credit products - Multiple inquiries hurt your score

• Carrying high balances - Keep utilization below 30%

• Closing old accounts - Length of credit history matters

Take control of your financial future today

Building good credit doesn't happen overnight, but the journey starts with a single step. Whether you choose a credit-building program, secured credit card, or another approach, consistency is key.

By making payments on time, keeping your credit utilization low, and avoiding common financial pitfalls, you can steadily improve your credit score.