We all know the age-old dilemma-you can’t get credit without a credit score, but you can’t build your credit score without credit. The good news is that it’s easier nowadays to develop your credit score, even if you currently don’t have one. Although it will take a bit of patience and diligence on your part, it’s certainly very achievable.

A good credit score is essential because you, like most people, might have to borrow money. For example, you may need to finance a vehicle, home, or large expense. If you have a good credit score, you’ll be more likely to get approval for a loan, and you might qualify for better rates.

How to build your credit score

Before we talk about how to build your credit score, let’s look at what a credit score is and how it impacts you. Your credit score comes from your credit report, which contains your name, date of birth, employment, address, and other personal details. You’ll also see a record of your credit accounts and payment history. Your credit report is pulled from the major credit bureaus in Canada, which are Transunion and Equifax.

A good credit score shows lenders that you have handled credit responsibly in the past and will be more likely to lend money to you than if you have a poor credit history. If, on the other hand, you have no credit history, they have no way of knowing whether you will repay the money they loan you. That’s why it’s difficult to borrow when you don’t have a credit score.

Some options to build your credit rating are easier than others to set up. We’ll look at several ways you can build your credit score. If you combine a few of these methods, you’ll be well on developing your credit score in a reasonably short amount of time.

Credit Building with Koho


Koho offers a simple, unconventional method for building your credit rating called Credit Building. Once you open an account with them, you can open a line of credit. Of course, you can’t access any money from the line of credit, but it reports to the credit bureau as a revolving credit account.

To establish a payment history that will result in a credit score, you make a $7 payment every month for six months. Koho reports each payment to the credit bureau, so it’s important to make your payments on time to develop a good credit score.

After six months, you can renew the program or cancel it. If you decide to cancel the program, check your credit report first to make sure you have established a credit score.

Get a credit builder loan

Credit builder loans are an excellent choice for people who want to build their credit rating. These loans are usually for a small amount the borrower pays off in one year. The loan is held on deposit until you’ve made all the payments. The payments consist of principal and interest. Once the loan is paid off, you get the money. The lender reports each payment to the credit bureau, so you’ll build a credit score for yourself with one of these loans.

Apply for a retail credit card


You’ll often get offers for store credit cards when you’re shopping. Some stores have customer service representatives who approach customers and offer them an application, or they ask you to apply for a credit card when you’re paying for your purchases.

Qualifying for a retail credit card can be easier than a credit card from a financial institution. This is because retail cards are sometimes paired with a major credit card company, allowing you to use them anywhere. In addition, your card utilization and payments will be reported to the credit bureau, enabling you to build our credit rating.

Retail cards often have higher interest rates than credit cards, so it’s important to know the rates and charges you might have to pay.

Apply for a secured credit card

Most financial institutions offer the option of applying for a secured credit card. To secure a card, you must deposit an amount equal to and sometimes more than the approved limit. The financial institution will hold the funds as security. Once you have established a good credit score, the lender might approve you for an unsecured card. If they do, they’ll release your funds to you.

Get a co-signer

You can add a co-signer to a loan or credit card if you don’t have a sufficient credit history to qualify on your own. Your payments will be reported to the credit bureau, resulting in your credit score. The co-signer will be liable for payments if you don’t make them, so it’s best to know that you can afford them before you involve another person.

Apply for a post-paid mobile phone


Some mobile phone companies don’t require a credit history from a customer. They often have specific stipulations regarding the services they provide for those with no credit history, but getting a phone without a credit score is still possible.

If you go this route to build your credit score, you’ll need a post-paid plan, not a prepaid plan. Prepaid plans do not create a credit history. A post-paid plan sends you a bill that you need to pay. Mobile phone companies report post-paid payments to the credit bureau, which will help you develop your credit score.

Apply for an unsecured credit card

You can apply for an unsecured credit card with no credit history. Some institutions may approve an unsecured credit card for you, depending on your circumstances. For example, students at post-secondary institutions are often approved for an unsecured credit card with a small limit. Using a credit card helps students establish a credit score while they’re in school.

Get a small loan that doesn’t require a credit score

Some lenders will approve loans for borrowers without a credit score. These loans are an option but are usually not the best way to establish a credit rating because their rates are incredibly high. If you choose to go this route, you’ll need to ensure the lender reports your payments to the credit bureau so you’ll develop a credit score.

Use your card


If you have a credit card, use it a few times and pay it off on time. Keeping it in your wallet and not using it will not help much if you want to build your credit score. Using your card will develop a credit history for you since the credit card company will report each payment to the credit bureau.

Pay off your card in full or make payments on-time

Timely payments are a critical piece of building a good credit rating. You must make your payments on time, every time. Regardless of how you develop your credit rating, the companies you deal with report all payments to the credit bureau, including the ones that are late or missed. Late or missed payments will result in a below-average or poor credit score. It can be harder to recover from a poor score than to build a credit score from nothing.

It’s important to check your credit score regularly to ensure the information is accurate. In addition, check your personal information and details about your credit history. If you find errors, contact the credit bureau to correct them.

You can use several ways to build your credit score from nothing. Combining some of these methods will help create your credit score quickly. Having more than one account open will provide the credit bureau with additional information to draw on. Of course, knowing the costs associated with your products and making your payments on time is essential. Click here to head over to Hardbacon’s website, if you have any additional questions about building your credit. Using every resource available to you will put you on your way to a higher credit score.