STARTING OVER IN A NEW COUNTRY TAKES TIME BUT IT’S POSSIBLE
If you are wanting to build credit in a new country where you are a permanent resident it’s not easy, but it’s certainly possible.
Building credit was one of those things that I had no idea I was going to face when I moved to Canada.
I’ve overcome this part of my journey and want to share with you all the ways I was able to build credit while being a newcomer to Canada.
Moving to Canada was a Blessing
Not a day goes by that I’m not proud to be part of this gorgeous country I now call home.
I’m still here and living it up and don’t fancy heading back to the UK any time soon. I love Canada!
I’ve battled through all the permanent resident requirements with my lovely wife at my side and it’s been such a learning experience that I hope to share with all of you.
It took me just over 100 days from the time I sent out the package that I prepared to Immigration Canada to being accepted as a Permanent Resident of Canada.
I am truly blessed to be living in such a beautiful country like Canada and all the opportunities it has given me.
Now I’m doing my part and giving back. Many people who land in Canada as new residents often find themselves lost when trying to establish credit to build a credit history.
New Permanent Resident
When I moved to Canada from the United Kingdom I was what they used to call a “Canadian Landed Immigrant” now called a “Canadian Permanent Resident”.
Although I did some research on a Canada Immigration Forum it was more about the legal aspect rather than the financial.
I already knew how to become a permanent resident so I had my work cut out for me.
No Canadian Credit History
I had no credit score and had to build credit from the bottom up meaning I needed to find out how to establish credit in Canada.
Even though my credit history in the UK was perfect and I had well over 50,000 British Pounds in the UK bank it meant nothing to the banks here in Canada.
They wanted me to prove I wasn’t going to be a right wally with money and they meant business.
It was tough enough to sort the paperwork to get through all the Immigration red tape but to have the banks want you to prove yourself is a whole other ball game.
Don’t get me wrong I agree with the entire process and understand fully why it is so thorough.
So, I had to do some homework as I don’t think we truly thought about credit ratings and credit scores before I landed in Canada as a permanent resident.
Through research, it was suggested I get a credit card to build credit.
But how do you build credit using a credit card?
How To Build Credit In Canada
Using credit cards to establish credit is probably the easiest way to go.
For myself, the biggest problem was trying to find a company willing to give me a credit card.
It does help if you are working full-time and have a letter from your employer but that was not the case with me.
I was lucky enough that I was a student at the time as I enrolled in school shortly after landing in Canada.
I don’t know if that’s what did it as it certainly wasn’t my accent and charm.
Although judging by the rate credit card companies dish out credit cards to University and College students it would come as no surprise as to why I was a prime candidate.
As a new resident of Canada, you can also talk to an advisor at the Bank of Montreal (BMO) where they offer a free banking plan for new residents.
The free banking plan at BMO is called the performance plan and you get it free for up to one full year with unlimited transactions.
That means you won’t get charged for bill payments, transfers, debit card purchases and BMO ATM withdrawals/deposits.
UK Credit Information
I was smart enough to bring with me my no claims bonus for my vehicle insurance from the UK which saved me thousands of dollars.
Something I recommend to anyone moving from the UK to Canada is to get authorized letters from your banks and insurance companies on your ratings.
Although I do caution you as not all insurance companies in Canada accept them.
Luckily, Johnson’s Insurance Canada did and I’m thankful to them for their faith in me.
I’m still a customer 11 years into my permanent residency in Canada and in perfect standing.
Tips For Building Credit In Canada as a Newcomer
What can you do to build your credit?
Here is what I needed to do to build a credit history in Canada as a permanent resident with no credit history:
- I made sure I understood what a credit score was in Canada.
- I opened a bank account with President’s Choice Financial now Simplii Financial
- I opened as secured credit card (or line of credit if you wish) with a $500 limit and I put $500 down on it as security (so, for example, you get to pick the credit limit on the card depending on how much you want to put down as security on the card.
- If you know what kind of spender you are the number should be fairly simple although it also depends on how much liquid cash you have. In my case, I gave the bank $500 so my limit was $500. It was one of the best ways to build credit in Canada.
- The money was put into a (GIC) Guaranteed Investment Certificate earning interest while I was earning credit. When I was released from my secured card I was given the money and interest back from my bank.
- Deposit money into my new bank accounts (High interest and Chequing)
- I opened a MasterCard with a $500 limit and used it every chance I could and paid it in full each month.
- Invested money in Registered Retirement Savings Plan (RRSP’s) but you can also invest in and Tax Free Savings Account TFSA, GIC’s or other investments through my bank.
- I opened a second credit card with Canadian Tire 5 months after my first MasterCard.
- I paid all of my bills every month on time and used credit cards when I could to build credit consistently.
Eventually, they (the credit card companies) offered me a higher limit on my cards once they noticed I was paying my bill in full.
It also helped that I had finished my education in Canada and was working full-time in my field.
Order Your Free Credit Report
I order my free credit report every year which I call the “Check 4 Your Credit Score“.
Now that I’ve established some history with companies it’s important to check my report for accuracy each year.
It’s easy peasy and everyone should be doing it.
- Check it over and make sure all my accounts are listed properly
- Check that my personal information is correct
- Check credit card information and payment history is correct
- Check that my credit rating is in perfect standing
For more information about Canada search Citizenship and Immigration Canada website for more resources.
Although it is time-consuming when you build credit the process is worth waiting for in this beautiful country called Canada!
Discussion: What other ways were you able to build credit in Canada?