Can KOHO help me improve my credit score?

For many Canadians, building or improving a credit score can feel confusing and slow. KOHO offers a few tools that can help you build credit over time, but it’s important to understand how they work, what they can (and can’t) do, and how to use them responsibly.

Below is a detailed look at how KOHO can help you improve your credit score, plus best practices to get the most benefit.

How KOHO Works in General

KOHO is a prepaid, reloadable Visa card paired with a spending and savings app. Unlike a traditional credit card, a standard KOHO account on its own does not involve borrowing money or carrying a balance, so it doesn’t automatically build credit.

To impact your credit score, you need to use KOHO’s specific credit-building features, which are optional add-ons.

KOHO Features That Can Help Improve Your Credit Score

1. KOHO Credit Building (Credit Building / Credit Building & Financial Coach)

KOHO offers a paid “Credit Building” service that’s specifically designed to help you establish or improve a credit history.

How it works (conceptually):

You subscribe to the Credit Building program for a monthly fee.
KOHO sets up a small line of credit or a form of installment/loan product in the background.
Each month, your on-time payments toward this product are reported to major credit bureaus (like Equifax and/or TransUnion, depending on KOHO’s current setup).
These on-time payments can help build a positive payment history, which is a key factor in your credit score.

What this can help with:

Building credit from scratch (e.g., if you’re new to Canada or have no prior credit history).
Rebuilding damaged credit by establishing a fresh record of on-time payments.
Diversifying your credit mix if you’ve only had one type of credit before.

What it doesn’t do:

It doesn’t instantly fix bad credit.
It doesn’t erase past late payments, collections, or bankruptcies on your report.
It doesn’t replace good overall money management.

2. KOHO Easy / Essential / Extra / Everything Plans and Responsible Use

While the prepaid KOHO card itself isn’t a credit card, its structure can still support better financial habits that indirectly help your credit score:

No risk of interest charges on purchases: You spend only what you load, which helps you avoid credit card balances that could lead to missed payments or high utilization.
Budgeting tools: The app offers real-time spending insights, goals, and savings features, making it easier to stay on top of bills and avoid overdrafts elsewhere.
RoundUps and savings: By automatically saving small amounts, you can build an emergency buffer. Having savings can help you avoid late payments on other credit accounts.

While these features themselves aren’t reported to credit bureaus, they support the behaviours that lead to a healthier credit profile.

How KOHO’s Credit Building Can Affect Your Credit Score

What Credit Bureaus Look At

Your credit score is typically based on:

Payment history – Are you paying on time?
Credit utilization – How much of your available credit you’re using.
Length of credit history – How long you’ve had credit accounts.
Types of credit – A mix of credit cards, loans, etc.
New credit inquiries – How often you apply for new credit.

KOHO’s credit-building tools mainly target:

Payment history – By reporting consistent on-time payments.
Credit mix – By adding another type of credit product to your profile (depending on how the product is structured and reported).

Potential Benefits Over Time

If you use KOHO’s credit-building product correctly:

You can start establishing a record of on-time payments in as little as a few months.
Over 6–12 months of consistent, positive reporting, many users may see some improvement in their scores (though the exact change varies).
It may be easier to qualify for other credit products in the future, such as traditional credit cards, car loans, or a mortgage, if lenders see a stronger credit profile.

How to Use KOHO to Improve Your Credit Score Effectively

1. Enrol in KOHO’s Credit Building Product

Check the KOHO app or website for the latest details on Credit Building or similar products.
Review fees, terms, and how it reports to credit bureaus.
Enrol only if you’re prepared to make every payment on time.

2. Set Up Automatic Payments

To avoid accidentally missing a payment:

Enable automatic funding of your KOHO account from your bank.
Ensure your KOHO balance always covers any scheduled credit-building payment.
Treat your credit-building payment like a fixed monthly bill.

Missed or late payments can hurt your credit score, so reliability is key.

3. Use KOHO for Day‑to‑Day Spending (Carefully)

Even though KOHO is prepaid:

Use the app’s budget categories to track spending.
Set up alerts and savings goals.
Avoid loading money you can’t afford to spend, just as you’d avoid overusing a credit card.

Healthy financial habits with KOHO can translate into better repayment behaviour across all your credit accounts.

4. Combine KOHO with Other Credit‑Building Steps

To maximize results:

Pay all existing credit accounts on time (credit cards, loans, phone bills, etc.).
Keep credit card balances low, ideally below 30% of your limit.
Avoid unnecessary new credit applications, especially several within a short period.
Check your credit reports periodically for errors and dispute any inaccuracies.

KOHO can be one piece of the puzzle, but your entire financial picture matters.

Who KOHO Credit Building Is Best For

KOHO’s credit-building features can be particularly helpful if you are:

New to credit: You’ve never had a credit card, loan, or line of credit and need to establish a history.
New to Canada: You may have good credit in another country, but you’re starting fresh here.
Recovering from past issues: You’re rebuilding after missed payments, collections, or other credit challenges.
Looking for a low-risk alternative to traditional credit cards: You want to build credit without the temptation to overspend on revolving credit.

If you already have a long, positive credit history and multiple active accounts, KOHO’s credit-building product may have a more modest impact compared to someone starting from scratch.

Limitations and Things to Keep in Mind

Not a magic fix: KOHO can help build or improve credit, but it cannot guarantee a specific score increase or timeline.
Fees apply: The credit-building product usually has a monthly cost; weigh this against expected benefits.
Policy changes: Product details, fees, and reporting practices can change. Always review KOHO’s current terms before enrolling.
Individual results vary: Your score is influenced by all your credit accounts and financial behaviour, not just KOHO.

Practical Step‑by‑Step Plan Using KOHO

Open a KOHO account and choose the plan that fits your needs.
Activate and fund your card from your bank account.
Subscribe to KOHO Credit Building (if available in your region and suitable for your situation).
Set up automatic transfers to ensure your KOHO account always has enough to cover the credit-building payment.
Use KOHO’s budgeting tools to manage day‑to‑day spending and avoid financial stress.
Monitor your credit score through a credit monitoring service or directly with bureaus every few months.
Adjust your strategy if needed—reduce other debts, lower utilization, or space out new credit applications.

Summary: Can KOHO Help Improve Your Credit Score?

Yes, KOHO can help you improve your credit score, but only if you use its dedicated credit-building features and maintain strong financial habits overall. The prepaid card alone doesn’t build credit; it’s the combination of KOHO’s credit-building product, on-time payments, and responsible money management that can lead to better credit over time.

Always confirm the latest KOHO product details and consider speaking with a financial advisor if you’re unsure whether a specific credit-building tool is right for your situation.