If you are an immigrant to Canada, the last thing you want is to have your credit score compromised because you are still new to this country.
Having a great credit score from your home country does not guarantee you'll have the same in Canada, regardless of the country of origin. There are some factors that you might not be aware of that will attribute to your credit score. This has been an issue for many and I will share with you how to improve your credit score as an immigrant in Canada.
Improve your credit score
The first step to improving your credit score is to understand what it is, as well as how it is calculated. Your credit score is a numerical representation of how you manage your debt. It's a three-digit number that represents your creditworthiness and can range from 300 to 900.
A high credit score (720+) can help you get approved for loans, mortgages, and other forms of credit much more easily than someone with a lower score (630+).
A low score will cause problems when you apply for any type of loan or credit card. If you have bad credit, there are steps you can take to improve your score and start getting better rates on loans and other forms of financing.
What Affects Your Credit Score?
Payment history - 35% - This is one of the most important factors in determining whether or not you will qualify for a loan or mortgage. If you pay all of your bills on time every month, this reflects positively on your record. Late payments are one of the most common reasons for lowering someone's score because they indicate that an individual has difficulty managing their finances effectively. The longer it takes someone to pay off their bills,
If you are a newcomer to Canada, then it is likely that your credit score is low. This could be due to a lack of Canadian credit history or because of poor credit decisions in the past.
Here are some tips to help you improve your credit score in Canada as an immigrant:
Get a Credit Card
One way to build up your Canadian credit history is by opening a new credit card account and using it responsibly. Choose an issuer with which you have had good experiences in the past and apply for their card so that they can review your application. Once approved, use the card regularly and pay off any balance each month to build up good behavior on your part.
Apply for a Mortgage
Once you have established yourself financially in Canada, consider applying for a mortgage loan so that you can purchase a home of your own. Depending on where you live, this may require that you go through an approval process with one of the country's major banks before being approved for such financing options. Once approved, though, securing this type of loan will allow you to make significant progress toward building up your financial security as well as helping improve your overall credit score within the country's
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