The short version

• Credit bureaus in Canada only collect information about credit activity in Canada.
• Your credit report is free to order from Equifax and TransUnion. Checking it does not affect your credit rating.
• Credit scores usually range from 300 to 900. Payment history is the most important part.
• Aim to use less than 30% of your total credit limit.

The situation

You land a job, find an apartment, and the landlord asks for a credit check.

In Canada, that check is based on a credit report: a record of how you have used credit here. Here is what goes into it, and four steps to start building yours.

Why your history from home may not show up

Two bureaus build your credit report in Canada: Equifax and TransUnion. According to the Financial Consumer Agency of Canada (FCAC), they only collect information about credit activity in Canada.

Some lenders may review a credit report from another country. You may need to provide it and meet with a bank officer. Do not count on that. Plan to build a Canadian file.

Your credit score is a number based on your report. Scores usually range from 300 to 900. A higher score is better. Bureaus and lenders use different formulas, so the same person can have different scores in different places.

What counts toward your score

FCAC lists these common factors:

• Payment history. FCAC calls it the most important part of your score.
• Credit use. How close you are to your limit. A $5,000 limit with $1,000 used is 20%.
• Length of history. Closing an old account can shorten your credit history and reduce your available credit.
• New applications. Applying for several at once can hurt.
• Types of credit. A mix, such as a credit card and a loan, used responsibly.

Where people commonly go wrong

1. Applying for many cards at once. Apply only when you need credit.
2. Skipping a payment during a dispute. FCAC says do not skip a payment even while you dispute a charge.
3. Never checking the report. Errors in your report can be the reason an application is declined.
4. Paying for a "free" score. Other companies may offer free reports, but some require a paid signup for your score. Order from the bureaus, and check the site starts with https.
5. Closing the oldest card. If it has no annual fee and is easy to manage, keeping it open, even at a zero balance, can help.

What to do: four steps

1. Order your free report. Both bureaus let you download or print it online at no cost. You can also order by mail with copies of 2 valid IDs, or by phone: Equifax 1-800-465-7166, TransUnion 1-800-663-9980. Equifax provides scores free in all provinces and territories. TransUnion's score is free only in Quebec and Ontario.
2. Get a starter card. FCAC says a secured credit card may be an option if you are a newcomer with no credit history. You put down a security deposit, and the limit is normally equal to or higher than your deposit. Deposits may range from a few hundred to a few thousand dollars. There may be a one-time set-up fee and an annual fee, so ask before you sign.
3. Use it lightly and pay on time. Keep your balance under 30% of your limit. Set an electronic alert for the due date. If you cannot pay in full, pay at least the minimum, and contact the lender early if you expect trouble.
4. Keep it open and check again. Order your report again before a lease, a car loan or a mortgage. If you are comparing car loan or mortgage offers, get quotes within a 2-week period: the bureaus count that as 1 inquiry.

Where to check

• Order your credit report (FCAC)
• Improving your credit score (FCAC)
• Credit report and score basics (FCAC)
• Choosing a credit card (FCAC)

The bottom line

Canadian credit bureaus start from Canadian activity. Order your free report, consider a secured card if you have no history, keep use under 30%, pay on time, and keep older accounts open.

Know your options. Plan your next step.

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