Building Credit- Buying Your First Home In Canada

Good credit is a big Asset in Canada

As a newcomer to Canada, it is important for you to understand how credit works and to build a good credit rating. The first step is to start building your credit history as soon as possible

Building Credit

When you apply for a new loan, you will hear most of the stuff like credit rating! Astonished!? This credit history of an individual plays a very big role in helping him buy big ticket purchases like real estate in Ontario, cars and the like.


What is credit history?

The credit  history means your shopping behaviour, personal spending habits and/or your payment history. In Canada and US, your credit rating affects on your credibility when you go for buying big purchases like a home or car or business financing. 

When you keep paying your credit card and other bills outstanding you keep on increasing your credit score.  The credit score is mathematical representation of your good economical behaviour.

Building Credit History

In order to help you build a credit history in Canada, you will need to apply for credit. One of the best ways to do this is to apply for a credit card. One of the challenges that most newcomers face is getting approved for a credit card. Since most newcomers do not have a credit history in Canada, finding an institution that will lend them money is difficult. As a result, building a credit history can be hard, at first.

The financial institutions, like banks, may give you a secured credit card at first. You should go for it as this is the easiest way to start building your credit. It gives you all of the advantages of a credit card, but requires that you set aside a certain amount of money or other cash-like asset to provide the bank with the security that you will pay the money back. For example, if the bank gives you a secured credit card with a spending limit of $1,000, you could set aside $1,000 in a short-term investment, which the bank will hold as security. Over time, you can build your credit history by paying your credit card bills on time, and eventually your credit rating should be high enough that you can confidently apply for and be approved for an unsecured credit card.When it comes to value and convenience, credit cards are a useful way to pay for everyday purchases—most retailers in Canada will accept them. There are also situations when a credit card may be the only way to pay: for example, when buying items online. Some services, such as car rentals, also require payment by credit card. So getting a credit card and managing payments can help in building your life in Canada.

Do you need any help?

If you need any help in applying for these credit cards, you can contact me through my website or give me a call.