squarepants

Am sure some of you are in the same situation I was in when I came over here, to establish a credit history that you need to be able to get credit, mortgage, loans and stuff, you have to have a good credit rating, and for most new folks, if you don't have a full-time steady job, it's impossible.

A way round it though, as soon as you get some kind of temporary contract or job, is to apply for "secured credit cards", that you pay a min of $500 into, and its held as collateral for a year or so, and then returned to you when a review comes up, and your limit is increased also.

You don't even need a big amount to establish your credit, all you want to do, is use the card and pay the total off every month when your statement comes thru'.

Here are a couple that offer secured cards, at 18% interest rate, with no fees:

http://www.capitalone.ca/canada/rece...card_faq.shtml

http://www.tdcanadatrust.com/tdvisa/nofee.jsp

http://www.scotiabank.com/cda/conten..._LIDen,00.html

Glaswegian

Its not always true that you need to have a Canadian credit history to get a mortgage. A 35% deposit and evidence you can pay the mortgage is enough for most banks.

We got a credit card from TD without a credit history - we did have to deposit a substantial sum but we were free to use that money immediately.

Loans are a different matter!

squarepants

I hear you, in other words, you got a secured card for the amount you deposited, but how many people are going to have 35% to deposit for a house? If you are loaded, you don't even need to worry about credit histories in the first place, but some of us are not that fortunate. The $500 deposit works the same way, you get a limit for that amount only.

Your good credit history will help secure you a loan, should you need it. They look into all that avenue before handing you over the loan. Try leasing/loaning a car without a credit history, and see what happens.

Anyway....I just thought it might be helpful to people with not so much money to deposit.


http://www.moneysense.ca/rates/credi...ates/index.jsp

Glaswegian

Hey I'm going to take that as a compliment! Its the first time ever anyone has remotely suggested I might be "loaded".

Perhaps my understanding of a secured credit card is wrong. I thought you pre-loaded your card with cash and then spend it. Then you would need to reload with cash before you could use the card again. A bit like a debit card but building a relationship with the card issuer!

So based on that description we dont have a secured card as after the first deposit we never had to deposit before spending again. It just turned into a regular card.

We tried to lease a car without a credit history. Ford said 'no' despite the local manager being onside. We wrote a very good letter which the local manager faxed to HQ and the lease was approved! So yes, we got a lease without a credit history - but only after we had a written tantrum!

squarepants

To clarify my previous posts:

http://www.edmontonbbb.org/tips/ct2114.htm


Hope newcomers find all this information useful when the time comes !

wizzard

Secured Credit cards are pretty good if you have the spare cash to use as the security. Some banks like TD require a deposit double your credit limit but many will do it equal. All you are doing is giving them a deposit equal to yoru credit limit which means that if you do max it out and then default they have the money already and have nothing to lose so there is no risk to them. The advantage to you though is that it is a genuine credit card and accepted as such everywhere such as those places that demand it like hotels or car rentals etc. and it builds up your credit rating just like any other card and there is no risk of not being accepted.

Another advantage is that the bank has to put your deposit somewhere and normally you can secure it in an account that pays interest, obviously not much interest in this day and age but something none the less so whilst you are using the credit and making your payments on time etc to build up a good rating your principal deposit is earning interest and once you satisfy the terms of 6-12 months of responsible use and they give you a real credit card and pay you back your deposit you also get the ineterest so you have made money on the deal. So given some major banks let you choose whatever deposit you wish to secure against the credit limit as there is no risk to them and you had some spare cash you could secure 5 or 10K and make a few hundred bucks in the process.

Drew

iaink

I did exactly that back in '98, my lease on a new Jeep Cherokee was my first canadian credit experience (on a work permit). Fortunately I had a reasonable income, but IIRC they had me on a 9% lease rate (would probably be 0% now) and a $4000 security deposit, with a big downpayment too!

Good advice about the secured cards. Also worth trying places like Leons and Zellers as they will often have less strict credit rules for store cards which will work in your favour over time. Small local businesses with payment plans (often through national credit agencies like Cooperators or AVCO) are great too, as they want the business and will sometimes be able to pull some strings to OK your credit.(I did this with a local bedroom furnature place)

There was a time when Canadian Tire were very keen to hand store cards out without being too choosey, but is that still true now the CT card is a bona fide Mastercard? Do any new arrivals have any experience going for the "unofficial" canadian identity card? Could be a good way to get a foot on the ladder if its still relatively easy to get the card, plus you save a ton of money on gas with the canadian tire money kickback, theres always something in that store you need to buy in my experience

Last thing is the golden rule for those on work permits trying to get credit. NEVER GIVE THEM YOUR SIN NUMBER! It starts with a 9 and it will get rejected by the computerised systems every time. Better to give them nothing than a SIN beginning in 9!

Good Luck

Iain

Glaswegian

Unsecured then - and with TD.

Ed_and_Karen

I had problems with credit when I came over. If you use a bank in your country that operates in Canada also, they may be willing to transfer some credit history. HSBC did this for me so I could get a cheque account. I've now just had a mortgage application approved with them. I was lucky to have a fair sum of money to put toward the house from the sale of our house in the UK. They used this as a 'line of credit' against my account.

This approach worked with my credit card too. I had an MBNA Europe card - now I have an MBNA Canada card. It was fairly painless.

It was having to pay for banking that did me in. They gave me a catalogue to choose which kind of cheque book design I wanted. Then I saw the prices. Hmm, the cheapest one looks great to me!

squarepants

Apologies first......the link was playing up, so i had to paste the info. This lady on msn sympatico, sums it all up:

9 ways to build a killer credit score
Posted 4/22/2004

By Liz Pulliam Weston

Establishing a good credit history has never been as important as it is today. It's much easier to start from scratch than to repair black marks later on. Here's how to push the right buttons at the credit bureaus. It’s not just that you’ll need good credit to get decent rates when you’re ready to buy a home or a car. Your credit history can determine whether you get a good job, a decent apartment or reasonable rates on insurance. One seemingly minor misstep -- a late payment, maxing out your credit cards, applying for too much credit at once -- can haunt you for years. If you’re just starting out, you have a once-in-a-lifetime opportunity to build a credit history the right way. Here’s what to do, and what to avoid.

Check your credit report
You’ll first want to see what, if anything, lenders are saying about you. That kind of information is contained in your credit report at each of the three major bureaus: Equifax, Experian and Trans Union. You can check your credit score with Equifax, through MSN Money - the cost varies from $15.00 to $22.00. Credit reports are used to create your credit score, the three-digit number lenders typically use to gauge your creditworthiness. Lenders also may look at the report itself, as may the landlords, employers and insurance companies who use credit to evaluate applicants.

Can you have a credit report if you’ve never had credit?
Maybe! Somebody else’s information could be mixed in with your report, either through a credit bureau mistake or because of identity theft; i.e. someone using your personal information to open bogus accounts. If that’s happened to you, you’ll need to clean up your credit report before trying to apply for new accounts. The Federal Trade Commission has information that can help.

Establish checking and savings accounts
Here’s a basic step that’s sometimes overlooked by people seeking credit. Lenders see these accounts as signs of stability. Opening checking and savings account is also one of the few things you can do as a minor to start building a financial history. While you can’t get a credit card in your own name until you’re 18 and can be legally held to a contract, many banks have no problem letting you open an account. Many, but not all. If your bank balks, you need to either look around for another bank or consider opening a joint account with an adult. The two most important factors in your score are:

Whether you pay your bills on time.
How much of your available credit you actually use. It’s essential that you pay all your bills on time, all the time. Set up automatic payments or reminder systems so that you’re never, ever late. All it takes is a single missed payment to trash your credit score -- and it can take seven years for the effects to completely disappear.

You also don’t want to max out any of your credit cards, or even get close. Keeping your credit use to less than 30% of your credit limits will help you get the best possible credit score -- and should help keep you from getting over your head in debt, as well.

Finally, you don’t need to carry a balance on a credit card to have a good credit score. Paying your bill off in full is the best way to keep your finances in shape and build your credit at the same time.

Piggyback on someone else’s good credit
The fastest way to establish a credit history can be to “borrow� another’s record, either by being added to a credit card as an “authorized� or joint user or by getting someone to co-sign a loan for you. Having a co-signer can allow you to qualify for loans you might not otherwise get. The loan will show up on your credit report and, if you pay it off responsibly, will help boost your credit score.

If you default, however, you won’t be the only one who suffers. The co-signer has basically promised to make good on this account, so any delinquencies will show up on her credit report as well. Being added as an “authorized user� has its risks, as well, for you as well as the person giving you access to the card.

If your father makes you an authorized user of his credit card, for example, his history with that account can be imported to your credit bureau file, giving you an instant credit record. If he has handled the account well, that reflects well on you. But if he hasn't, his mistakes would also become yours. Any late payments or other problems could make it harder for you to get future credit than if you’d established your history without help.

Even if you trust the person adding you to the card, you may not be able to piggyback on his or her credit. Some credit issuers won’t report authorized users to the credit bureaus, particularly if the user is not married to the original card holder. If the point is to give you a credit history, the person who’s adding you as an authorized user should call the issuer and ask how (or if) your status as a user will be reported.

Apply for credit while you’re a college student
Credit experts used to warn college students away from those booths set up on campus by credit card lenders -- the ones that promise free stuff for signing up. It turns out, however, that there’s no easier time to get a card than while you’re a college student
said Gerri Detweiler, author of “The Ultimate Credit Handbook.� Lenders are willing to take risks with you that they won’t once you graduate, probably because they know that your parents’ willingness to bail you out will end once you get your sheepskin. You still have to exercise some caution, though. Look for a card with a low or nonexistent annual fee and low interest rates. For now, just get one: Opening a slew of credit accounts in a short period of time can make you look like a risky customer.

Apply for a secured credit card
If you can’t get a regular credit card, apply for the secured version. These require you to deposit money with a lender; your credit limit is usually equal to the deposit. You’ll want to screen your card issuer carefully. To be frank, there are a lot of bad guys in this particular niche of the credit world. Some charge outrageous application or annual fees and punitively high interest rates. Your credit union, if you have one, is a good place to start looking for a secured card. You can also check Bankrate.com’s list of secured credit card issuers.

Ideally, the card you pick would:

Have no application fee and a low annual fee

Convert to a regular, unsecured credit card after 12 to 18 months of on-time payments

Be reported to all three credit bureaus. If the issuer doesn’t report to the credit bureaus, the card won’t help build your credit history.

Get a finance company card
Gas companies and department stores that issue charge cards typically use finance companies, rather than major banks, to handle the transactions. These cards don’t do as much for your credit score as a bank card (Visa, MasterCard, Discover, etc.), but they’re usually easier to get. Again, don’t go overboard. One or two of these cards is enough. If you get many more, you may find that later in your life these accounts could prevent you from getting the highest possible credit score. That’s not a reason to avoid them completely, because right now they’ll do you some good. Just don’t apply for half a dozen.

Get an installment loan
To get the best credit score, you need a mix of different credit types including revolving accounts (credit cards, lines of credit) and installment accounts (auto loans, personal loans, mortgages). Once you’ve had and used plastic responsibly for a year or so, consider applying for a small installment loan from your credit union or bank. Keeping the duration short -- no more than a year or two -- will help you build credit while limiting the amount of interest you pay.

Use revolving accounts lightly but regularly
For a credit score to be generated, you have to have had credit for at least six months, with at least one of your accounts updated in the past six months. Using your cards regularly should ensure that your report is updated regularly. It also will keep the lender interested in you as a customer. If you get a credit card and never use it, the issuer could cancel the account.

Just remember the credit tips mentioned earlier:

Don’t charge more than 30% of the card’s limit.

Don’t charge more than you can pay off in a month. As mentioned earlier, you don’t have to pay interest on a credit card to get a good credit score, and it’s a smart financial habit to pay off your credit cards in full each month.

Make sure you pay the bill, and all your other bills, on time.

By Liz Pulliam Weston

MikeUK

I don't know if this can still be done..

But when i first came over on my work permit. I put $1000 in a GIC

and the bank gave me a creditr acrd with a matching limit... needless to say the GIC is still $1000 but the credit limit has climbed..

squarepants

Scotia I believe still does that from my conversation with them on the phone. Its a shame PC doesn't do secured mastercard, they have one of the best interests going at 17.9% a year, with no fees of course.

MikeUK

Nah....Ignore the interest rates...if your after a good credit rating..you need to pay it off right away...

So to start with .. the interest rate should not be a real issue...

squarepants

I know, like my post above says, the best thing to do, is to pay off the bill in full, and not the minimum payment asked for, that way you escape the interest.


http://www.moneysense.ca/rates/credi...ates/index.jsp



Also make sure you don't go over 30% of your limit a month. I need someone to actually explains which is the best option, loaning or leasing a car, and the best way to go about getting the best deal.

As said in one of my posts, we are considering the new subaru ( forrrester XS 2.5 ), but a decent second hand one will be ok, if the price is right, with not a lot of milage on it.

Ed_and_Karen

PC wouldn't even offer me a bank account - even though I have one with HSBC! They looked at the 9 on the front of my SIN and showed me the door! I'll be sticking with HSBC. Even though they don't have many branches here, they are being very helpful.