Building Credit History Canada
Your credit history is created when you first borrow money or apply for credit in Canada. Canadian companies that lend money or issue credit cards, such as banks, credit unions, retailers, will make use of your credit history on a regular basis.
The main credit reporting agencies or credit bureaus in Canada record your financial history along with credit histories of millions of other Canadians.
So how do you build a credit history in Canada?
Credit is one of those things you can’t live without. Let’s say you just finished school and want to get yourself a new car. You explain to the dealership you have a stable job and fill out the for to lease a car, only to find out a few weeks later that you’ve been rejected. Why? Because you don’t have a credit history. How do you establish a Canadian Credit History? Simple, you get a credit card, a loan or a mortgage. But wait, you need to get credit in order to establish a credit history. Ah, seems like typical Catch-22 case.
Make sure you have a Credit History in Canada
First, let’s make sure that you don’t have any credit history at all. You can do this by checking with the Canadian Credit Bureaus and reviewing your credit report.
Get that Credit Card with no credit history!
Our recommendation is that if you have a job, you will most likely have a bank for your payroll to be deposited. Go to your bank and apply for one. You may not have a credit history, but you do have financial history with your bank. They will see that you have money and regular income and at the very least will be able to get you a secured line of credit – a type of credit card where the funds from your bank account is used as insurance in case you don’t pay your credit card.
Department store Credit Cards
Another strategy to start building your credit reports in Canada is to apply for those credit cards that are offered to you at the stores. Store cards are generally easier to obtain because of more lenient approval requirements. If you don’t get approved for one store credit card, if doesn’t mean you won’t get approved for another.
This stands for Registered Retirement Savings Plans. Visit your bank and get more information about the many options they have. A retirement savings plan is where you put aside a small amount of money towards your retirement savings. Banks are always will to help you save. By having an RRSP, if will make it easier for you to borrow money to contribute to your savings. Then pay off your loan.
Building a credit history in Canada is free.
Credit Reports Canada recommends that you be aware that building a credit history is free. It is not necessary to pay someone to build your credit. Once you get the first credit card or loan, make sure you pay it on time and you’ll be on your way to building a good credit history. With a good credit history and a good credit score, it will make life much easier for you when you are ready to buy your new car or your first home.