Best way to build up credit history
#16
Re: Best way to build up credit history
First stage is to get a credit card. If you have zero credit history in Canada, you may have to get a secured credit card, which means you deposit the credit limit in a savings account and it is locked. You then use the credit card in the normal way. Pay it off in full on time, every time, for a year and the bank will likely convert it to a normal, unsecured credit card. Use it for bloody everything - even if it is a small coffee.
Not sure if you could still get a newcomers package at one of the banks, as they usually have decent credit card offers as part of it.
If you have an Amex in the UK, you can transfer it to Canada and have a nice, shiny, unsecured card ready to rock straight away.
Not sure if you could still get a newcomers package at one of the banks, as they usually have decent credit card offers as part of it.
If you have an Amex in the UK, you can transfer it to Canada and have a nice, shiny, unsecured card ready to rock straight away.
Also at the same time I opened a scotia bank visa cc account (unsecured)
it was a few years ago so not sure if it’s still available but may be worth a look
Last edited by joinerboy; Apr 22nd 2018 at 2:22 pm.
#17
BE Enthusiast
Joined: Sep 2017
Location: Halifax, NS
Posts: 345
Re: Best way to build up credit history
Scotiabank seem to be very liberal when handing out credit cards to new immigrants. I worked for a different bank and we were always losing out to them because of either the secured vs their unsecured, or a lower credit limit.
#18
Re: Best way to build up credit history
For me, this isn't good enough. The house is in two names, two people consume the power/internet/whatever within the house, two names should be on all the bills.
#19
Re: Best way to build up credit history
Several years ago my banking officer (Scotia) pointed out to me that I didn't have a credit rating, despite having been here for years. Everything was in my wife's name, including our Desjardins credit card and the various utility bills.
He suggested a low-cost and fairly basic credit card. I use it a lot and always pay on time. My credit score is now very good.
He suggested a low-cost and fairly basic credit card. I use it a lot and always pay on time. My credit score is now very good.
When I purchased my car the Honda dealer financed in house.
I used the Scotia credit card every month and after 9 months of regularly paying it off they increased the limit to $5k and I had a decent credit rating. They also gave me a $10k line of credit and overdraft although overdraft's aren't as common, effective or useful here.
It's a fairly quick process but it can also turn bad fairly quick.
My Canadian room mate at the time had a terrible credit rating just on the basis he would forget to make payments.
Dot your i's and cross your t's.
Last edited by JamesM; Apr 23rd 2018 at 4:48 pm.
#20
Forum Regular
Joined: Aug 2016
Location: Vancouver, Canada
Posts: 183
Re: Best way to build up credit history
Question for those who did the Amex option: was your whole Amex credit limit transferred over or did you only get a lesser limit in Canada?
Many thanks
MelVan
Many thanks
MelVan
#21
BE Enthusiast
Joined: Sep 2017
Location: Halifax, NS
Posts: 345
Re: Best way to build up credit history
We had 1500 quid credit limit in the UK (as it was only used as a secondary card) and were offered $2000 here. It has since gone up quite markedly.
#22
Forum Regular
Joined: Mar 2010
Location: Vancouver Island
Posts: 48
Re: Best way to build up credit history
We are in this position right now. No credit rating here. And when I applied for a small basic credit card from Scotiabank, they called to ask for my line-something on my tax return. I said, I haven't done taxes here yet, I've just moved. He said he would call back then I got an email saying my application was declined. So it's very difficult, at least we have jobs and money but we are looking to buy a home in the next year or so, so we need this sorted. I'm assuming after our taxes are done, we'll be in a better position to get credit and build our rating. :-/
#23
Re: Best way to build up credit history
We are in this position right now. No credit rating here. And when I applied for a small basic credit card from Scotiabank, they called to ask for my line-something on my tax return. I said, I haven't done taxes here yet, I've just moved. He said he would call back then I got an email saying my application was declined. So it's very difficult, at least we have jobs and money but we are looking to buy a home in the next year or so, so we need this sorted. I'm assuming after our taxes are done, we'll be in a better position to get credit and build our rating. :-/
#24
Banned
Joined: Apr 2009
Location: SW Ontario
Posts: 19,879
Re: Best way to build up credit history
We are in this position right now. No credit rating here. And when I applied for a small basic credit card from Scotiabank, they called to ask for my line-something on my tax return. I said, I haven't done taxes here yet, I've just moved. He said he would call back then I got an email saying my application was declined. So it's very difficult, at least we have jobs and money but we are looking to buy a home in the next year or so, so we need this sorted. I'm assuming after our taxes are done, we'll be in a better position to get credit and build our rating. :-/
https://www.cba.ca/newcomers-to-canada
(links to all the newcomer accounts)
Last edited by Siouxie; Dec 20th 2018 at 9:35 pm.
#25
Re: Best way to build up credit history
Building a credit profile that makes banks want to lend you more, and one which raises your credit score quickly are two different things, if you want to do both you need to pay your credit card twice per month, or billing cycle.
This is because credit utilisation ratio is the joint largest factor in determining credit score, along with payment history, both being responsible for over 30% each of how your score is calculated. Payment history takes time, obviously, whereas utilisation ratio is much easier to work in your favour immediately.
You should always aim to keep utilisation below 70% of your total credit limit, and ideally below 30%, but you could be doing this and missing out on it having any positive effect if you don't pay on the right day of the month.
Each credit card, lender etc reports to the credit bureaus once per billing cycle, and the number they report is your statement balance.
So, say your "statement date" the date your statement actually prints is the 10th of each month. You spend $1500 out of your $2000 limit each month, wait for your statement and then pay it in full. Great from the banks point of view, you're spending a lot and showing you can pay it off. Not great from your credit score point of view, as each month the bank is reporting your $1500 statement balance to the credit bureaus, who see your credit utilisation ratio staying at 75% month after month without ever being paid down.
All they are seeing is the same $1500 figure being reported, so it looks like you're carrying a high balance and not paying it off.
Pending transactions don't appear as part of your statement balance, so for a payment to be counted you need to make it several business days ahead.
Using the above example, if you spend the $1500 on your credit card between the 11th of one month and say the 5th of the next month, then pay off $1000 on the 6th.
That means your statement will show a balance of $500, or 25% of your utilisation ratio. Then on the 11th you pay off your statement balance of $500, and start the process again straight after.
Doing it this way means the credit bureaus will always be using 25% as your utilisation ratio instead of 75%, and no single factor makes your score rise more quickly than lowering your credit utilisation ratio.
I've just used that method to boost our credit scores, and we went from the low end of "good" to "excellent" in under three months. Crazy what a difference making payment ts on a different date makes.
I've also tried playing around with utilisation ratios between 5% and 10%, as some say 10% boosts your score even more, but I haven't personally found it makes a difference. Perhaps though we're beginning to get a long enough length of good payment history, 2.5 yrs, that that factor smooths out slight changes in utilisation, so long as the ratio stays under 30%.
Hope that helps, it took me a long time to figure it out, but it makes a huge differenice!
This is because credit utilisation ratio is the joint largest factor in determining credit score, along with payment history, both being responsible for over 30% each of how your score is calculated. Payment history takes time, obviously, whereas utilisation ratio is much easier to work in your favour immediately.
You should always aim to keep utilisation below 70% of your total credit limit, and ideally below 30%, but you could be doing this and missing out on it having any positive effect if you don't pay on the right day of the month.
Each credit card, lender etc reports to the credit bureaus once per billing cycle, and the number they report is your statement balance.
So, say your "statement date" the date your statement actually prints is the 10th of each month. You spend $1500 out of your $2000 limit each month, wait for your statement and then pay it in full. Great from the banks point of view, you're spending a lot and showing you can pay it off. Not great from your credit score point of view, as each month the bank is reporting your $1500 statement balance to the credit bureaus, who see your credit utilisation ratio staying at 75% month after month without ever being paid down.
All they are seeing is the same $1500 figure being reported, so it looks like you're carrying a high balance and not paying it off.
Pending transactions don't appear as part of your statement balance, so for a payment to be counted you need to make it several business days ahead.
Using the above example, if you spend the $1500 on your credit card between the 11th of one month and say the 5th of the next month, then pay off $1000 on the 6th.
That means your statement will show a balance of $500, or 25% of your utilisation ratio. Then on the 11th you pay off your statement balance of $500, and start the process again straight after.
Doing it this way means the credit bureaus will always be using 25% as your utilisation ratio instead of 75%, and no single factor makes your score rise more quickly than lowering your credit utilisation ratio.
I've just used that method to boost our credit scores, and we went from the low end of "good" to "excellent" in under three months. Crazy what a difference making payment ts on a different date makes.
I've also tried playing around with utilisation ratios between 5% and 10%, as some say 10% boosts your score even more, but I haven't personally found it makes a difference. Perhaps though we're beginning to get a long enough length of good payment history, 2.5 yrs, that that factor smooths out slight changes in utilisation, so long as the ratio stays under 30%.
Hope that helps, it took me a long time to figure it out, but it makes a huge differenice!
#27
Just Joined
Joined: Nov 2015
Posts: 17
Re: Best way to build up credit history
We are in this position right now. No credit rating here. And when I applied for a small basic credit card from Scotiabank, they called to ask for my line-something on my tax return. I said, I haven't done taxes here yet, I've just moved. He said he would call back then I got an email saying my application was declined. So it's very difficult, at least we have jobs and money but we are looking to buy a home in the next year or so, so we need this sorted. I'm assuming after our taxes are done, we'll be in a better position to get credit and build our rating. :-/
Did you apply for the card yourself online or something? If so thats probably why it didnt happen, your best bet is to go into a bank with your permit or whatever you have plus a pay stub or job offer if you have one and specifically say a newcomer account/credit card (startright for scotiabank) then it is processed to over ride the no credit issue.........as others have said all big 5 can do just need to tell them and prove less than 3years since landing
#28
Banned
Joined: Apr 2009
Location: SW Ontario
Posts: 19,879
Re: Best way to build up credit history
Did you apply for the card yourself online or something? If so thats probably why it didnt happen, your best bet is to go into a bank with your permit or whatever you have plus a pay stub or job offer if you have one and specifically say a newcomer account/credit card (startright for scotiabank) then it is processed to over ride the no credit issue.........as others have said all big 5 can do just need to tell them and prove less than 3years since landing
Or make an appointment with a customer service officer, rather than seeing a teller who likely won't have a clue. You can start the opening of a newcomer account (not just a credit card) online with several banks - but then complete it by going in and meeting with them.
Definitely say the magic words 'newcomer account' - you can have been here for several years and still count - or even have an account at a different bank!