Canada lenders highlight steady credit-building options for young adults

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Credit-building options for young adults

Highlights

RBC survey reports nearly half of Canadians aged 18 to 24 are actively working to build or improve their credit score, highlighting strong demand for credit-building tools.
Credit Counselling Society and RBC emphasize options beyond traditional credit cards, including secured cards and bill payments, as effective ways for young adults to establish credit.
Experts note missed payments remain on record for extended periods, weighing on future borrowing, while consistent on-time payments and low balances gradually strengthen credit scores.

Credit-building tools and payment habits

As reported by Moneysense, a credit score in Canada reflects how likely a person is to pay bills on time, but experts say a credit card is only one of several ways young adults can establish that record.

Ali Harris-Saunders, community relations manager at non-profit Credit Counselling Society, says many young adults underestimate how early credit can matter because it affects not only future mortgage applications but also apartment rentals, cellphone plans, car loans and other borrowing access. She says a missing or uneven credit history can signal risk to lenders even when a person is trying to avoid debt.

Lucianna Adragna, vice-president of client segments and everyday banking at RBC, says setting up a basic credit card and arranging automatic payments can help create a foundation. Harris-Saunders adds that putting a phone bill in a young adult's name can also contribute to a credit file when payments are reported to a credit bureau.

If a standard credit card feels risky, Harris-Saunders says consumers can ask their bank about a secured card backed by a deposit, which can help limit overspending. She also recommends starting with small recurring expenses such as streaming subscriptions or cellphone bills, while keeping card balances around 30% of the total limit and paying them off on time each month.

Implications for Canadian households and banks

RBC says a survey published last month found nearly half of Canadians aged 18 to 24 who were surveyed are actively trying to build or improve their credit score, while more than one-quarter remain unsure whether they are taking the right steps. That points to ongoing demand for financial education products and entry-level banking tools aimed at first-time borrowers.

For households, the advice underscores that building a solid credit history is a gradual process rather than a one-time action. Adragna says repeated on-time bill payments, low balances and full repayment over time support score growth, while Harris-Saunders warns that missed payments remain on record longer and can weigh on future borrowing options.

Previously, we examined research showing early-career job changes accounted for more than a third of wage growth among 10,000 young American men.

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