How to build your credit as a student in Canada?

Building  a  good  credit  history  as a student  is one of the most important things you  can  do  for yourself.  When  you want to  buy a  car,  get  a personal loan  and  purchase  your first  home,  lenders will look at your credit  report. Start with finding the best student credit card to build credit. I know, it sounds like it’s all in the distant  future, but it takes time to build credit. And,  the best time to build your credit is when you’re still  a student. 

For instance, when you’re ready to  buy your first  car,  auto  lenders  will want to see your credit history and your  credit  score.  Without  a credit footprint, it is difficult to get the things you want.  So,  here  are a few pointers to guide you on the best way to safely build your credit score  and ensure that your education is meaningful. 

8 tips on how college students can build credit  

1. Choose the best student credit card to build credit

Different credit cards have their own unique perks and reward programs, so it’s important to find a student credit card that works for you. When you apply for a card,  the best option  is to find a card  that will help you spend money responsibly.  That way you're not always carrying a balance,  which  means  you’re  building a positive credit history.  

There are so many card options and many card issuers,  so how do you decide on the best student credit card? There are cards that offer  Scene  points for free movies, cashback on all your purchases and  much more. Choosing the right card as a student involves making sure you’re spending money responsibly and building your score. Try not to get distracted with all the other perks. There may be  hidden  or high fees associated with these offers. 

Instead, check out the  Refresh Cash Secured Card option. This option offers low-interest rates,  a low annual fee, and reports your payment activities to  both Canadian  credit  bureaus  to  help  you build credit. 

2. Keep your credit utilization within range

A good  credit utilization ratio is less than 30 percent. This means using less than 30 percent of your credit limit. So, on a  card with a $1,000 limit, when you keep your balance below  $300  you're within the 30% credit utilization ratio. If  you  regularly  go above this,  it may negatively  impact your score  on your  credit  report. 

Learn more about  credit utilization  and how it impacts your score. 

3. Create a living budget

Create a budget and stick to it.  Make sure to make your card payments on time to avoid high-interest rates. Money may be a bit tight while you’re studying, remember to stay focused. Sacrifice now to ensure a healthy financial future.  Trust us, you’ll thank yourself later.

4. Look for financial opportunities at school 

Are you on a scholarship program? Have you researched and applied to see if you’re eligible? Grant money is a financial game-changer — it can help fund your schooling. Scholarships are available at most schools, and it’s worth the effort to see if you qualify. 

5. Search for a job

Did you know that some schools offer on-campus earning opportunities? If that’s not an option, usually the surrounding off-campus areas will offer part-time work for students. Finding a part-time job while going to college will help you have disposable income so you can spend and save money while building your  score.  

6. One credit card is plenty

Every time you apply for a credit card, your score will take a slight hit because of the hard credit inquiry to the two Canadian credit bureaus – this inquiry shows on your credit report and can  impact  your credit  report. Do your research before applying for any  financial  products and stick to just one card. Because we are recommending that you stick to one card make sure it's the best student card to build credit. There are lots of card options available with cashback offers, but they may have hidden fees and high-interest rates attached to them, so watch out!

It’s best to look for a credit card issuer  such as Refresh Financial  who  doesn’t  do a hard check  and also  offers a  credit building program. 

7. Use your student loan for essentials 

You need groceries, textbooks and a place to live. Remember, your loan is intended to cover what you need, and not what you want. Use your loan responsibly and pay it  back  on time.  

Focus on improving your score in college, so when you graduate, you have a lot of low-cost borrowing options.  

8. Find ways to pay down your debt

Generally speaking, six  months after your final college semester is when it’s time to start paying back your student loan and any other debt.  

Check out this great article on  how to pay down your debts. It’s filled with helpful student debt advice. 

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Refresh financial offers custom credit building solutions to help you build your credit score FAST.