In first year, most students just want to know if their debit card will cover coffee, rent, and a bus pass. The surprise comes later—when you try to lease a car, rent an apartment in Toronto, or get a new phone plan and the company checks your credit.
Building credit as a student in Ontario doesn’t mean going into debt. It means using small amounts of credit in a controlled, boring way so future applications are less stressful. This guide walks through realistic options for students, what “good credit” looks like in Canada, and the mistakes that quietly hold your score back.
How credit works for students in Ontario
What a credit score is
In Canada, your credit score is a three-digit number that usually ranges from about 300 to 900. Higher is better. It’s based on your history with borrowing and repaying money:
- Do you pay on time?
- How much of your available credit do you use?
- How long have you had accounts open?
- How often do you apply for new credit?
Credit bureaus like Equifax Canada and TransUnion collect this information from lenders and create your file and score.
Why your score matters before and after graduation
As a student, your score can affect:
- Approval for student and starter credit cards
- Terms for a student line of credit
- Whether you need a bigger deposit for a phone plan or apartment
- Later on, rates for car loans or a mortgage
You don’t need a perfect score while you’re in school. Your goal is to build a clean, positive history so that by the time you graduate, lenders see you as reliable.
Step 1: Get your first student credit card
Most major banks in Ontario—like TD, RBC, Scotiabank, BMO, CIBC—offer student credit cards with:
- No annual fee (often tied to a student chequing account)
- Lower limits (e.g., $500–$1,500)
- Basic rewards or cash back
How to use it to build credit (not debt):
- Put small, predictable expenses on the card (e.g., $60 groceries, $80 transit, a Netflix subscription).
- Aim to use no more than ~30% of your limit.
- Example: If your limit is $1,000, keep your balance under $300.
- Pay the full balance before the due date every month.
You don’t need to carry a balance to build credit. Paying in full is better: it builds history without interest charges.
Read: Software for Students in Ontario
Step 2: Consider a secured credit card if you’re new or not approved
If you’re an international student or you were declined for a regular card, a secured credit card is often the next step.
- You provide a security deposit (for example, $500–$2,000).
- Your credit limit is usually equal to that deposit.
- The bank holds the deposit in case you don’t pay.
You then use it like any other card: small purchases, low utilization, full payments on time. After 6–12 months of responsible use, many banks may let you move to an unsecured card and return your deposit.
Read: Buying Your First Car in Ontario
Step 3: Become an authorized user (if you have trusted family)
If a parent or close family member in Canada has a credit card with:
- A good payment history
- A low balance relative to the limit
They might add you as an authorized user. In some cases, that account may show up on your credit report and help you build history faster.
However:
- This depends on the card issuer and credit bureau.
- If they miss payments or max out the card, it can hurt your credit too.
So only do this with someone who is very organized with money, and make sure everyone understands the responsibility.
Read: G1 to G licence Ontario
Step 4: Build good habits that actually move your score
Always pay on time
Payment history is usually the single biggest factor in your score.
- Set automatic payments for at least the minimum amount.
- Use calendar reminders for due dates.
- If you can’t pay in full one month, still pay on time, and make a plan to clear the balance soon.
Even one missed payment can stay on your report for years.
Keep your utilization low
Credit utilization is the percentage of your limit you’re using.
- Under 30% is a good general target.
- Using 10–20% regularly and paying in full is even better.
Example:
- Limit: $1,000
- Monthly spending on card: $200
- Utilization: 20% → healthy.
Keep your oldest account open
The age of your accounts matters. Once you have your first student card:
- Try to keep it open long-term.
- If you later get a “better” card, you can keep the old one for a small recurring bill and still benefit from its age.
Read: EI for students in Ontario
Step 5: Other ways students can strengthen their credit profile
Student lines of credit and small loans (with caution)
Some students use a student line of credit (LOC) or a small personal loan.
Pros:
- Can help build a mix of credit types.
- Useful if you genuinely need funds for tuition or living costs.
Cons:
- You pay interest on what you borrow.
- It’s easy to over-borrow “because it’s available.”
Only take on credit you actually need, and always have a repayment plan.
Phone plans, utilities, and rent
In Canada:
- Some postpaid phone plans may report to credit bureaus, especially if you default.
- Many utilities and landlords don’t report positive payments, but they can send unpaid bills to collections.
A safer way to benefit from rent is to look into rent-reporting services (if available through your landlord or a third party). These can report on-time rent payments as a positive trade line.
Read: Mature student Ontario: returning to school after 25
How long does it take to build “good” credit as a student?
If you:
- Get a small card or secured card,
- Use it every month,
- Keep utilization low, and
- Never miss payments,
you can often move from “no history” to a decent score within 12–24 months.
You don’t need to obsess over the exact number. Focus instead on:
- No late payments
- Low balances
- Avoiding unnecessary new applications
That pattern is what lenders want to see when you later apply for a car loan, apartment, or mortgage.
Common credit mistakes students should avoid
- Maxing out cards “just to build credit”
- Applying for multiple cards within a short period (each application can be a hard inquiry)
- Carrying a balance on purpose “to show activity” (unnecessary interest)
- Cosigning a friend’s loan when you can’t afford the risk
- Ignoring payment reminders or leaving mail unopened
Credit is easier to build than repair. Protecting your record now saves you money and stress later.
Mini example: A realistic student credit-building plan
You’re a second-year student in Ontario:
- September: Open a no-fee student credit card with a $1,000 limit.
- Each month: Put $200 of regular expenses (groceries + transit) on the card.
- Before the due date: Pay the full $200 from your chequing account.
- After 6 months: Your score begins to reflect steady, on-time payments and low utilization.
- After 18–24 months: You may qualify for better cards or a car loan at more reasonable rates, because you’ve shown consistent behaviour.
Nothing fancy—just small, repeatable, on-time.
Read: Community college vs university in Ontario
FAQs
Can international students build credit in Ontario without PR?
Yes. Many banks offer newcomer or international student products, including secured and unsecured credit cards. You’ll usually need ID, proof of status, and sometimes proof of income or enrolment. Your credit history is based on your activity in Canada, not your PR status.
Does OSAP help build credit while I’m in school?
Not usually. OSAP funding itself doesn’t show up as an active tradeline while you’re in school. However, once you enter repayment, your student loan payments can affect your credit—on-time payments help, missed payments hurt.
Do debit cards build credit?
No. Debit cards use your own money from your bank account. Because you’re not borrowing, these transactions don’t get reported to credit bureaus and don’t build credit history.
Is it bad to check my own credit score?
Checking your own credit through official channels is considered a “soft inquiry” and doesn’t hurt your score. In fact, checking once or twice a year is smart so you can spot errors or signs of identity theft early.
What if I already missed a payment?
Don’t panic, but act quickly:
Pay the overdue amount as soon as you can.
Call the lender and ask if they can reverse any late fee (no guarantee but worth asking).
Going forward, set up automatic minimum payments so it doesn’t happen again.
Over time, consistent on-time payments will matter more than one mistake.
Key takeaways
- You can start building credit in Ontario with a simple student or secured card, not big loans.
- The biggest wins are on-time payments and low utilization, repeated every month.
- Keep your oldest account open when possible to help your credit age.
- Avoid common traps like maxing out cards or applying for too many accounts at once.
- Aim for steady, boring credit habits for 1–2 years; your future applications will be much easier.
