Want to build your credit score but aren’t sure where to start? One useful first step is knowing where your credit stands today.
Checking your credit score can give you a better picture of your credit health. From there, you can focus on practical habits that may help you build your credit history over time.
Start by checking your credit score
Before trying to build your credit score, it can help to know your current score.
With Credit Karma, you can check your credit score, which is calculated using information from your TransUnion credit report. Checking your own score with Credit Karma won’t lower it.
Your score gives you a starting point. You can also use Credit Karma to better understand some of the factors that may be affecting your credit health.
Ready to see where you stand? Join Credit Karma to check your credit score and start keeping track of your credit health.
What is a credit score?
A credit score is a number that helps lenders understand how you have managed credit in the past. Credit scores generally range from 300 to 900.
There are two major credit bureaus: TransUnion Canada and Equifax Canada. They collect information about your credit accounts and use it to create credit reports.
Because credit bureaus may have different information about you, your credit scores can vary depending on the credit bureau and scoring model being used.
The credit score you see through Credit Karma is calculated using information from TransUnion.
Why does your credit score matter?
Lenders may look at your credit history and score when deciding whether to approve you for credit.
Your credit information may be considered when you apply for:
- Credit cards
- Personal loans
- Lines of credit
- Car financing
- Mortgages
Depending on the situation and applicable rules, landlords and some service providers may also ask to check your credit.
A higher score does not guarantee approval or a particular interest rate. Lenders may use a different credit score or credit bureau and can consider other information, such as your income, existing debts and their own lending requirements.
How can you build your credit score?
There’s no quick fix for building credit. Instead, focus on consistent habits that show you can manage credit responsibly.
Pay your bills on time
Your payment history is an important part of your credit profile.
Try to make at least the minimum payment on your credit accounts by the due date. Automatic payments and reminders can help you avoid accidentally missing a payment.
If you can afford to pay your credit card balance in full each month, you can also avoid paying interest on purchases.
Keep your credit balances manageable
How much of your available revolving credit you use is known as your credit utilization.
For example, if you have a credit card with a $2,000 limit and a $1,500 balance, you’re using a large portion of the credit available to you.
Keeping your balances lower relative to your available credit may help your credit profile.
Be thoughtful about applying for credit
When you apply for certain credit products, a lender may perform a “hard inquiry” on your credit report.
Applying for several new credit accounts within a short period can affect your score. Consider applying only for credit products you need and can reasonably manage.
Checking your own credit score with Credit Karma is different from applying for new credit and won’t lower your score.
Consider the age of your accounts
The length of your credit history can also play a role in your credit score.
Before closing an older credit card, consider how it could affect the length of your credit history and the amount of credit available to you. Also consider any fees or costs involved in keeping the account open.
Don’t take on debt just to build credit
You don’t need to carry a credit card balance or pay interest just to build your credit history.
Using credit responsibly and paying what you owe on time can help demonstrate good credit habits without taking on unnecessary debt.
Check your progress over time
Credit scores can change as information in your credit report changes.
Checking your TransUnion-based credit score with Credit Karma can help you monitor your credit health over time. You can also review factors that may be affecting your score.
Building a healthy credit profile is generally a longer-term process, and consistent habits matter.
It’s also a good idea to review the information on your credit reports and look for anything you don’t recognize or believe is incorrect.
Bottom line
If you want to build your credit score, start by understanding where you stand. Credit Karma lets you check a credit score calculated using information from your TransUnion credit report without lowering your score.
From there, focus on the fundamentals: pay your bills on time, keep balances manageable and apply for new credit thoughtfully. Over time, consistent credit habits can help you build a stronger credit profile.