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  • Pooja Varma

Create Your Credit History

Starting a brand new life, in a new country can be difficult, especially when you have to create a credit history. Creating a credit history is an important milestone for new comers to Canada.

The Canadian credit system is notoriously unfriendly to newcomers. I was personally quite disappointed to learn that my credit history in my home country was worthless. And for some immigrants, the whole idea of building up a good credit history is quite foreign. I feel that building up a credit history is the number one challenge for new comers.

What is creating a credit history?

Your credit history is something that financial institutes will look at when you apply for a credit card, a line of credit, a loan or mortgage. Credit history is important because it shows a record of 'your credibility' when it comes to repaying the money borrowed. So if you are some one who forgets to pay bills on time, it is time you pull up your socks!! Because your credit history will get affected if you miss payments or dont make them on time.

How do I build credit?

There are a few ways that you can do this:

1. Open a Bank Account: Go to any bank and open a bank account. You can open a bank account even without a job. Many banks have new comer packages that offer a credit card as well (go with this option, the credit limit might be low, but it will give you something to start with). I personally have an account with TD Bank, and I am very happy with them. The customer service has been very helpful at the branch and over the phone. They have a large network of banks and ATM's across Canada.

2. Start building your credit history ASAP: You can do that once you have your bank account and a credit card. Some of the services you’ll need once you land in Canada could include mobile, internet, cable, hydro (electricity) and others. Signing up for some of these services and paying them off on time will help build your credit score.

3. Pay your credit card on TIME: Once you have set up these facilities through your credit card, pay the credit card on time, and pay the amount in full.

4. Use different types of credit: When building your credit score, it is good to have multiple sources of credit. However, ensure you only borrow within your means!!

There are a few things that I was recommended when I moved here.

One of them was to have more than one credit card. You can get these from COSTCO, Walmart or Hudson Bay. Between my husband and I we got two credit cards between COSTCO and Walmart.

Second one was that if we were not planning to move immediately to Canada after our landing, then the best thing was to open a bank account, get your credit card and use it in your home country for one transaction a month and pay the bill regularly. In this case you can find out the international rates that would apply with the bank. But you would have started building the credit history even before you move.

Below you will find links to the major banks in Canada, and this could probably help you with your search for the bank.

Happy credit building!! Like my dad says, spend wisely!!

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Toronto, Ontario, Canada


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