How Do I Build a Credit Report as a Student?

Updated Oct 20, 2024
Fact checked by
Vincent Morin
Vincent Morin

Vincent Morin

Vincent Morin
My name is Vincent and I've been a stay-at-home parent to two young boys since achieving financial independence in 2021 (FIRE). Previously, I worked for 12 years in financial technology for a major US investment bank (G-SIB). I'm passionate about personal finance, stock market investing, reading, writing, cycling and gardening. I'm also the founder of Retraite 101, a personal finance blog followed by over 30,000 people on social networks and quoted in several media, blogs and finance books. Despite early retirement, I continue to write about personal finance to share my passion with Quebecers and motivate them to take charge of their finances.
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Étudiant - scrore de crédit
To the point Do you know how to build a credit report as a student? In this article, we explain the factors that influence your credit score.

A good credit score will help you succeed in the most important stages of your life. In fact, when you start building your credit history as a student or young adult, your score and credit history can help you make important decisions. For example,buying your first home or car.

Of course, it’s never too late to start building a good credit history. But the sooner the better. So, in our opinion, building a good credit report, even when you’re a student, is essential. In this article, we explain the factors that can influence your credit score. But, more importantly, the elements to help you build and maintain a good credit score.

What Is a Credit Score?

A credit score is a means by which financial institutions and other lenders evaluate your ability to repay your debts.

A low credit score means you’re less likely to repay your loan on time. As a general rule, lenders don’t want to do business with someone who’s behind on payments. So a poor credit rating is a huge risk. Also, it can prevent you from achieving your goals, such as buying your first home or car. It can also prevent you from renting an apartment. Therefore, the higher your credit score, the greater your chances of success with financial institutions.

In our opinion, it’s essential to start building your credit report as soon as possible, even as a student.

What Factors Influence Your Credit Score?

Your credit score is based on information lenders submit to the credit bureaus: Equifax and Transunion. Credit scores range from 300 to 900. However, several factors can change or affect your credit score:

  • The amount of debt you have accumulated.
  • The variety of loans you currently have and the payments you have made.
  • The number of credit cards you have opened and the average age of your accounts.
  • Available credit utilization ratio.
  • The number of late payments.
  • Etc.

These factors have different values in calculating your credit score. So it’s better to have several credit cards, but make payments in full, than to have one credit card, but not make payments on time.

A good credit report, even when you are a student, gives you advantages such as :

  • A lower interest rate on your loans.
  • A better chance of being approved for other loans or to rent an apartment.
  • Higher limits on your credit cards.
  • Access to a wider choice of credit cards.
  • Lower insurance premiums, in some cases.

Finally, your credit score indicates how fiscally responsible you are. This is essential for a financially stable life.

How Can I Build a Good Credit Report as a Student?

Now you know how crucial a good credit score can be to your standard of living.
But, do you know how to build a credit record as a student?
In the following lines, we present some simple ways to build orimprove your credit score.

Check Your Credit History

First of all, you need to know whether your credit score is good or bad. You can also request a credit report from one or both of the two main credit bureaus: Equifax and Transunion. If you don’t know how to check your credit score, here are two guides to help you:

Some financial institutions such as Desjardins, Tangerine, CIBC and Scotiabank allow you to check your credit score via their platform.

Checking your credit history and credit score is crucial for several reasons. First, you’ll know what your credit score is, and where you need to improve. But reading your report will also ensure that no errors have crept into your credit report.

Open a Student Credit Card or a Secured Credit Card

Contrary to what many of you may think, you do have access to credit cards as a student. Ideally, you should start by applying for a student or secured card. This will enable you to start building your credit history.

Most Canadian banks offer dedicated credit cards for students or recent graduates. They are often free of charge and allow you to accumulate rewards or cash back.

If you love to travel and want to collect points to save on future trips, National Bank offers the National Bank Platinum Mastercard®.
If you prefer the simplicity of cash back, the NBC mycredit Mastercard is a no-annual-fee card for students.
It offers up to 1% cash back and cell phone insurance.

Make Your Monthly Payments on Time

If you have payments to make, make sure they’re made on time. Your punctuality in paying your bills will help improve your credit score. You can also program automatic payments, so you never forget to make a payment. Late payments have a major impact on your credit score.

Keep Credit Utilization Low

To improve or build your credit report as a student, you need to keep your credit utilization ratio below 30%. For example, if your credit limit is $1,000, don’t exceed a balance of $300 on your card. If you regularly reach your credit card limit, contact your bank to increase it. Alternatively, you could make several small payments a month.

Bottom Line

In short, your credit report, even as a student, is an important aspect of your current and future financial health. In fact, a high credit score will enable you to access better rates for loans, whether it’s for your first home or a car. So you need to monitor your credit score regularly and improve it, if necessary. By following our advice, you’ll be ready to launch your adult life with an excellent credit report.

Frequently Asked Questions About Student Credit Reports

Do loans and bursaries affect a student's credit report?

Student loans are similar to car loans and mortgages. You repay an amount with interest over a set period of time. When you repay your student loan according to the terms of your repayment plan, you develop good credit habits. This will have a positive impact on your credit rating. Plus, your student loan repayment will become part of your payment history, which counts for 15% in calculating your credit score.

Can a line of credit help me build my credit report as a student?

If you respect the repayment terms of your line of credit and maintain a utilization rate of 30% or less, this can help build your credit report as a student. Repayment of your student line of credit will form part of your payment history, which counts for 15% in calculating your credit score.

What is the maximum limit on a student credit card?

The limit is determined by the financial institution. It varies according to a number of criteria, including your income, expenses and credit history (even for students). However, the limit on student credit cards is often between $500 and $1,000.

How can I save money as a student?

There are many ways to save money as a student. You can reduce your current and unnecessary expenses, save money with credit card rewards points, obtain government loans and grants, save your money in a high-interest savings account, and more. Building your credit report when you’re a student can save you money later on. For example, to get a better interest rate on a future mortgage.

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Milesopedia

Milesopedia
Milesopedia is your ultimate guide to maximizing the benefits of rewards programs, credit cards, and budget-friendly travel. Written by a passionate team of experts in personal finance and travel, each article authored by Milesopedia reflects our commitment to providing practical advice, effective strategies, and in-depth analysis to help you save money and travel smarter. Whether you're a beginner or an expert, Milesopedia is here to support your goals and answer all your questions.
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