The Importance of Building Credit for Newcomers to Canada
Starting a new life in Canada can be filled with many opportunities, but the first few weeks settling in Canada can be overwhelming. Some of the first things that people do include applying for a Social Insurance Number, applying for a Health Card, getting a library card, and setting up finances.
If you are looking to make a big purchase, such as buying a home, a car, or paying for education, you might look into borrowing money from a bank or financial institution. In order for them to loan you money, they will look into your credit history to determine whether you have good credit.
Your credit history is something that a bank or financial institution will look at when you apply for a credit card, a line of credit, a loan or mortgage. Credit history is very important because it shows a record of how well you will be able to repay the money borrowed.
If you miss payments or make late payments, your credit history will become bad and this will make it difficult for you to borrow money in the future.
[Photo Credit: About Credit Score Improving]
Why is building credit important?
Establishing a credit history can be very important because this record documents your past borrowing and repayment, which can determine your ability to repay your debts.
As a newcomer to Canada, it is important for you to understand how credit works and to build a good credit rating. Newcomers can build good credit by applying for a credit card and making timely payments.
How do I build credit?
Those that are new to Canada may find it difficult to be eligible for a credit card without a credit history or employment income. In these cases, there are many options that are available if you are looking to start building credit. Get some financial advice from banks in your neighbourhood or through this Bank Resource List.
The Toronto Public Library also has many programs geared for Business, Legal, and Personal Finance. Have a look to see if any are happening near you! Don't forget to also check out our Business & Personal Finance Blog for more information.
When it comes to building credit and seeking financial advice, you are not alone. Have a look at some of the experiences of other new to Canada individuals. Newcomer journeys from Jian, Kim, and Young Keun at Bank of Montreal, stories from landed immigrants, foreign workers, and International students at Scotia Bank, and a video of how Myin found success as a newcomer to Canada at Royal Bank Canada.