The importance of credit history in Canada

Are you a foreigner in Canada and still unable to acquire a loan through the bank? Of course, one of the most important things immigrants must do when they arrive in this country is to manage their credit history and incorporate it into their daily lives. Having a good credit history is what will give them the opportunity to acquire essential products and services here, and will open doors to obtain everything from a credit card to a mortgage loan. 

How do you achieve all this, read along with me in this blog dedicated to life in Canada, as here I will detail the importance and benefits of building your credit history from scratch and the guide to doing so. Let's get started.

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What is credit history?

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Credit history is basically a record of how you manage your debts and financial payments, which includes information on loans, credit cards and any type of financing you have acquired. This history is managed by credit bureaus that calculate your credit score, which ranges from 300 to 900, and determines your level of risk as a borrower.

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Why is it important to have a credit history in Canada?

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Credit history in Canada is a determining factor for many financial activities that the newcomer might do, such as:

1. Rental Housing: Some Canadian landlords and property owners check the credit history of tenants to ensure that they will pay rent on time.
2. Access to services: Telecommunications companies, such as cell phone or utility companies, may check your credit history before offering you a contract.
3. Job opportunities: in some cases, companies may also check your credit, especially if you will be handling funds.
4. Obtain a loan: banks and other financial institutions will review and use your score to evaluate your eligibility for a loan or line of credit.
5. Apply for a mortgage: if the newcomer wishes to purchase property in a Canadian province in the future, a good credit history will allow him/her to obtain better interest rates.

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Important: A credit report can help the immigrant find housing faster because the immigrant will be able to apply for a rent and damage guarantee that will make the homeowner feel more comfortable having a backing to secure their property. Our Settlement Immiland team can guide you through the process. If you wish, you can fill out this form for a free quote. 

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Guide to building your credit history from the ground up

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If you are new to Canada and do not yet have a credit history, follow these steps to start building a solid credit history:

1. Pay your bills on time: Keep good control over your payments. Timely payments for your services, such as telephone, rent and utilities, can reflect your ability to manage debt and improve your credit score.
2. Monitor your credit history: You can check your credit score for free once a year through agencies such as Equifax or TransUnion. Monitoring your history will help you catch errors and make sure your financial behavior is being reflected correctly.
3. Keep your credit usage low: While it is important to use your credit, it is also important not to exceed 30% of your credit card limit. Keeping this percentage low shows that you are not completely dependent on credit and are managing your finances in a balanced way.
4. Sign up for services that report rental payments: In Canada, some companies allow you to report your rental payments to credit bureaus. This can help you build your history if your landlord offers this option or if you use a service that specializes in this.
5. Apply for a secured credit card: A secured credit card is an excellent option for those who do not yet have a history. This card works just like a traditional credit card, but requires a security deposit as collateral. Use it for small purchases and pay the balance in full each month to demonstrate responsible financial behavior.

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Settlement Immiland 

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As a newcomer or immigrant to Canada, do you need housing support? Many foreigners are looking to settle in the country as soon as they can, but are not always aware of the options offered by the Canadian rental system. 

The reality is that you can find everything from homestay, the popular student residences (shared or private rooms and private apartments), special accommodation (apartment or private house) and self-booking. Settlement Immiland offers these services, and many clients have found their home with us. In which city are you looking for housing? Choose one to schedule your appointment.

That's as far as I'll keep you company for today. Thank you for reading. Remember that building a good credit history in Canada can take time, so start now, this is an investment that you will value from day one until you see your financial future solid and robust. 

With this guide you will be able to establish a firm base in the Canadian city of your dreams. Settlement Immiland Canada offers housing search for newcomers, support in opening bank accounts, obtaining health insurance, phone line, among others. We are here to help you. 

Write us at info@immilandcanada.com and don't forget to follow our social networks at the bottom of this page. Success with your credit history!

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With love,

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Immiland Canada