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Tips for building your credit score as a newcomer to Canada

Tips for building your credit score as a newcomer to Canada

Canada welcomes thousands of new citizens every year and if you’re one of them, welcome! You’ll find our country friendly, welcoming and accepting of immigrants. You will also find yourself needing a car unless you’re living in one of the cities. Unfortunately, you'll have to build credit score as a newcomer to Canada all over again.

 

The good news is that Canada is built around the car. The bad news is that you won’t have enough of a credit score to access a Glen Morris car loan right away.

If you follow these tips, it won’t take long to get a sufficient credit score for a car loan though.

 

Get a bank account

 

Just like in your home country, your bank account is the foundation of everything else you do financially. The first thing you’ll need to do to build credit score as a newcomer to Canada, is apply for a chequing account. Preferably one that supports automatic payments.

 

You can use one of the main Canadian banks or open an account with the Canadian branch of your existing bank, whatever you prefer.

 

Get a credit card

 

If you have just arrived in Canada, you’ll need a credit builder or secured credit card to begin with. We recommend a secured card. You can access them without a credit history and it will help you build your credit score within a month or two.

 

A secured credit card requires a cash deposit equal to the credit limit (usually $1,000) to begin with. Use the card for regular expenses, pay it off each month to avoid interest and you’ll begin creating a credit history.

 

Make sure to pay it off in full each month as the interest rate can be high!

 

Deposit cash

 

If you’re arriving here with cash, deposit it into your bank. This can be enough for them to issue a standard credit card or offer a faster route to standard credit.

 

Each bank handles this differently but if you deposit a large amount of cash and begin building a positive credit history, some banks will offer standard credit much earlier than they otherwise would.

 

Get a contract phone

 

It may be tempting to keep costs low with a prepaid phone but having a contract phone can help you build credit. Regular payments can help build a payment history, which contributes in a small way to your overall credit score.

 

There are a few networks around who will work with recent immigrants including Virgin, Koodo and Fido. There are likely others too.

 

Get utilities in your own name

 

Some apartments come with utilities as part of the rent. If at all possible, get utilities in your own name. That way, you have more entries in your payment history (if you use a utility that adds notes anyway). This will be another example of you paying on time and being responsible with money.

 

Expect to spend around 18 months building a sufficient credit score for a car loan or for standard borrowing. You may be able to access credit cards before then and we would recommend you do once you can.

 

Just make sure to pay them in full every month and use automatic payments so you never miss one!

 

We will use all our skill and experience to deliver the lowest possible Glen Morris auto loan rates, guaranteed. Contact Car Nation Canada Direct to learn how we can help.

 

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