Without credit history, it can be difficult to qualify for things like an auto loan or a mortgage. This may be especially true if you’re new to Canada, or if you’re a recent graduate and thinking about big purchases. Building up a good credit score can be a tricky task, but it’s worth the effort. Here are a few tips to get started on building credit from scratch.

Open a credit card

While it’s possible to build credit without a credit card, they are excellent tools to do so if properly managed. If you’re just starting out building a credit profile, you likely won’t qualify for a high-end rewards card. But you can start with a secured credit card, or if you’re a student, a student credit card.

A secured card is backed by a cash deposit the borrower makes upfront, which is usually the same as your credit limit. While a student credit card is aimed at helping students build credit while they’re still in school. Both cards are used like any other credit card, you’ll buy things, make payments and incur interest if you don’t pay your balance in full.

Become an authorized user

If you have the ability to become an authorized user, this a great way to leverage a family member’s good credit history, to build on your own. Doing so will add this person’s card payment history to you credit profile, so you’ll likely want to ensure that this individual has a history of paying on time and carrying a low balance.

Not only is this a great way to build up your credit profile, it can also reduce the amount of time it takes to generate your credit score.

Maintain good credit habits

It’s important to remember that in order to build a good credit score, you must have a history of making payments on-time. This means not only are you making payments on time, but you’re paying at least the minimum payment for that period. This is the most important thing you can do to build your credit score.

If you’re using a credit card, it’s also important to remember to keep your credit utilization low. Utilization is the percentage of your credit limit that you use. A good rule of thumb, is to keep this number below 30%. You should also avoid applying for multiple credit cards close together, as well as closing any credit cards – as this can potentially damage your credit score.

Credit takes time to build. But with patience and diligence, your time and effort to build and maintain your score will pay off.