You have finally relocated from your home country and arrived in Canada- the land of possibilities and new beginnings. You immediately start trying to adjust as a new immigrant in Canada and get a lay of the land. You have so many things to do as a newcomer. A new job, a place to reside, and new connections. You have to start afresh. It’s daunting but doable.

And then, there’s the matter of your finances. You know that to make your new life easier, you have to start building a good credit score. You’ve heard about credit scores but you know where to get started. 

If this sounds familiar, you’re in the right place. This article will teach you the practical steps and tips to help you get started on building a solid credit score in Canada as a new immigrant.

What Is A Credit Score And Why Does It Matter?

Before we go on, we have to explain briefly what a credit score is and why you need it in Canada. 

A credit score is a three-digit number that is like your financial passport representing your creditworthiness. It’s like a meter that measures on a scale, how likely and how soon you can repay any money borrowed.

Credit scores are not used in some countries but it is important in countries like the USA and Canada.

Why Is a Credit Score Important for a New Immigrant?

• It improves the ease with which you’ll get different types of loans. A good credit score gives you access to financial loans, auto loans, mortgages, etc. 
• You get juicy interest rates and pay lower than someone with a bad credit score.
• You get access to products and services. In some places, a good credit score can help in renting a good apartment or employment opportunities.

How To Build A Strong Credit Score In Canada.

If you are responsible with your finances, building your credit score to a desirable number is very possible. To get started, here are some things you need to do:

Pay your bills on time: It’s important to pay all your recurring bills on time. This is crucial and contributes significantly to your credit score. Making late payments for these recurring bills can affect your credit score.

Get a secured credit card: If you’re just starting out, it is advisable to get a secured credit card. With this, you can have a credit limit and also have a card for making payments.

Get a starter credit card: After getting started with your secured credit card, you should also get a simple unsecured credit card. Start with a low limit within your budget and carefully pay off the balance at the end of each month.

Find other ways to report payment history to credit bureaus: Inquire and find out if your rent and other payments can be included in your credit reports to the credit bureau when you make these payments. 

Monitor your credit report: Check your credit report regularly through the credit bureaus in Canada.

Helpful Habits To Help You Maintain A Good Credit Score In Canada.

To help you stay on the good side of your credit score, we have compiled some helpful tips for you. If you maintain these habits, you’re well on your way to efficient financial management and an excellent credit score as a new immigrant in Canada.

• If you have issues remembering when your bills are due, consider automating these bills or using digital apps to act as reminders.
• Maintain a below 30% balance to your credit limit and try not to exceed it. Avoid accumulated charges on your card too and try to pay off your credit card balance.
• When checking your credit reports at the credit bureau, be sure that it is accurate and without errors. Report any errors immediately to the credit bureau and other appropriate authorities.
• Try to use your credit cards as much as you can. This helps to build your credit score over time.
• Don’t apply for too many credit cards at once. Allow time and space between your applications.
• If you have any issues with your credit and need advice, please reach out to a financial advisor for professional help.

Here are some resources available for new immigrants to learn more about credit score building in Canada:

• Prosper Canada Learning Hub.
• Credit Canada.
• The Financial Consumer Agency of Canada (FCAC) provides information on credit reports and scores and protects you from fraud and identity theft.
• Free workshops from settlement agencies on credit building.
• Banks and other financial situations.  

Wrapping Up.

New immigrants to Canada can achieve their financial goals by taking notes using these tips and following safe financial management practices. Good credit requires time, patience and regular effort. Follow these tips and you’ll gradually build a great credit score in Canada opening the way for an easier life and better financial well-being.

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