A credit score is how businesses like banks and employers evaluate your ability to manage debt. You can read more about the nature of credit and why it matters in “What to know about credit if you’re new to Canada.”

A good credit score can help you get approved for a mortgage, rent housing, lease a car or get a loan for one, and even get a job. A poor score will make it more difficult to do these things.

There are seven things newcomers can do to build good credit scores.

1. Start using a credit product as soon as you can.

In Canada, credit scores are based on your past six years of credit activity in Canada. The longer your history of using credit responsibly, the better your credit rating will be.

To get started, look for a credit product, like a credit card, that is designed specifically for people without a credit history.

2. Pay your bills in full and on time.

Paying the full balance of your bills, on or before their due dates, will help build your credit score. This includes not only credit card bills and loan payments but also bills like utilities and rent. If you don’t have the money to pay the full balance, making the minimum payment will help you avoid negative changes to your credit score.

Whenever you don’t pay the full amount owed on a bill, you’ll be charged interest on the remaining balance.

If you can’t pay an entire bill, pay as much as you can. Making only the minimum payment can lower your credit score over time because you’ll be carrying a higher outstanding balance. If you consistently only pay the minimum, think about speaking with an ATB everyday banking advisor to make a plan to pay off your debt and create a budget.

You can use reminder apps to help you remember to make payments before they are due, and automatic payments to pay the full balance or minimum payment.

3. Keep your outstanding balance low.

Carrying a large outstanding balance on your credit card or on a line of credit (also referred to as revolving debt) tells lenders you may be spending more than you can afford. Try to minimize outstanding balances..

To build a very strong credit score, your outstanding balance should be less than 30% of your card’s limit. If you have a credit limit of $10,000, this would mean keeping your outstanding balance below $3,000.

4. Use more than one kind of credit product.

Using more than one kind of credit product tells lenders that you can manage your credit carefully. This will boost your score.

For example, using a personal loan, a line of credit and a credit card can demonstrate your responsible credit management.

5. Track your use of credit.

Regular review of your use of your credit card and other credit products will help you keep track of your financial situation and make smart decisions. This will help you build a strong score. It can also help you notice financial fraud. You can review your transactions using online or mobile banking.

6. Check your score at least once a year.

By checking your score at least once a year, you will track whether your score is improving or declining. A score over 670 is considered good. Anything over 800 is exceptional.

Equifax and TransUnion are the two agencies that track credit scores in Canada. Follow either of those links to see your credit report, which will include your credit score. Accessing the report is free.

If you bank with ATB and have a credit product with us, you can also check your score easily from within ATB Personal web.