Building credit is one of those things nobody really teaches you.

One of the most common things I see with first time buyers is not bad credit, just no credit. And honestly, it makes total sense. If nobody told you to start building it, why would you?

What lenders actually need to see

Most lenders want to see at least two years of reporting credit history before they will consider you for a mortgage. Reporting credit means accounts that show up on your credit bureau, things like credit cards, lines of credit, or certain loans, where your payment history is tracked over time.

If you have been paying rent, utilities, and your phone bill on time for years, that is great. But most of those payments do not show up on your credit report, which means lenders cannot see them.

The simplest way to start building

Get a credit card. Use it for small regular purchases like gas or groceries, and pay it off in full every month. That is really it. Do that consistently and you will have a solid credit foundation within two years.

If you are just starting out and do not want the risk of overspending, a secured credit card is a great option. You deposit your own money as the limit, so you are essentially borrowing against yourself. It works the same way as a regular card for credit-building purposes.

You do not need a perfect financial past

Having no credit history is not the same as having bad credit. It just means we need a plan and a bit of lead time. If you are thinking about buying a home in the next couple of years, starting now puts you in a much stronger position when the time comes.

If you are not sure where you stand or want to talk through what mortgage-readiness looks like for your situation, I am happy to help.

Karen McClean is a mortgage broker based in Whitehorse, Yukon, working with first time buyers, families, and people with non-traditional income across the territory.