5 Credit Cards to Build Your Credit Score in Canada

For many Canadians, the first approval letter from a lender comes only after a series of refusals, especially if you are new to credit or rebuilding after past challenges. The good news is that there are specific types of cards and accounts designed to help you establish a track record, provided you understand how they work and use them with a clear plan.

Building credit in Canada centers on showing that you can borrow small amounts and pay them back reliably. Your credit report records this behaviour, and your score is a summary number that many banks, landlords, and even some employers check. The five options discussed here focus on people with limited or damaged history who need structured ways to demonstrate responsible use.

Understanding the word no from lenders

Hearing no from a bank when you apply for a card can feel discouraging, but it usually reflects gaps or risks in your profile rather than a permanent judgment on your finances. Lenders look at factors such as past late payments, high balances on existing accounts, or simply having too little information available if you are new to the country or just starting out.

Each new application can trigger a hard inquiry, which may cause a small, temporary drop in your score. That is why repeatedly applying for many unsecured cards after a refusal can work against you. Instead, it can be more effective to step back, check your credit report from the major bureaus in Canada, and consider products that are specifically designed to help when your initial answer has been no.

Secured credit cards as a structured starting point

Secured credit cards are one of the most common tools for building or rebuilding a score in Canada. You provide a refundable security deposit, often starting around a few hundred dollars, and the lender sets your limit based on that amount. From there, the card functions very much like a regular unsecured product: you make purchases, receive a monthly statement, and must pay at least the minimum amount by the due date.

Used carefully, a secured card can help you demonstrate positive habits. Keeping your balance well below the limit, making every payment on time, and avoiding cash advances can all contribute to a stronger profile over time. In Canada, many secured products report to the major credit bureaus, which is essential, because only accounts that are reported can influence your score.

The details of fees and interest vary across providers, so it is important to look beyond the marketing headlines. As of the latest publicly available information, examples of Canadian credit-building products include Home Trust Secured Visa, Capital One Guaranteed Secured Mastercard, Neo Secured Credit, Plastk Secured Visa, and the KOHO prepaid Mastercard with a separate credit-building service. Typical costs include annual fees in some cases, security deposits for secured cards, and subscription charges for credit-building features, as shown in the table below.

Prices, rates, or cost estimates mentioned in this article are based on the latest available information but may change over time. Independent research is advised before making financial decisions.

Prepaid cards with credit building features

Prepaid cards by themselves do not usually build credit in Canada, because you are spending your own loaded funds rather than borrowing. However, some financial technology companies now offer prepaid cards combined with separate credit-building services. With these, you may pay a monthly subscription fee, and the provider reports structured payments or responsible use to the bureaus, even though you are not using a traditional line of credit.

A prepaid option with a credit-building feature can make sense if you struggle with overspending on traditional credit or prefer the discipline of only using loaded funds. Because you are paying a fee, it is important to confirm exactly what is reported, how often it is updated, and what happens if you miss a payment on the subscription itself. Reading the fine print and checking independent reviews can help you understand whether the benefit justifies the ongoing cost.

Once you have chosen a card or credit-building service, the way you use it is as important as the product itself. Limiting your spending to amounts you can comfortably repay each month, setting up automatic payments at least for the minimum, and monitoring your statements for errors all support a healthier record. Over time, some lenders may be willing to graduate you from a secured product to an unsecured one, returning your deposit while keeping the same account open so that your history continues to age positively.

Checking your credit reports regularly from the major bureaus in Canada can also help you track progress and spot issues early. Looking at changes over several months, rather than from week to week, provides a clearer view because scores naturally move within a range. By combining an appropriate card, realistic budgeting, and consistent on-time payments, people who once heard no can gradually build the foundation for more financial options in the future.