Newcomer Digest – Thursday's Edition

Featured Story

Start Building Your Canadian Credit. 4 Steps.

Canada's credit bureaus only track activity in Canada, so your history from home may not show up. Here is how to start.

You land a job, find an apartment, and the landlord asks for a credit check.

In Canada, that check is based on a credit report. A credit report is a record of how you have used credit here. It is built by two bureaus, Equifax and TransUnion. According to the Financial Consumer Agency of Canada (FCAC), they only collect information about credit activity in Canada.

Some lenders may review a credit report from another country and ask you to meet with a bank officer. Do not count on it. Plan to build a Canadian file.

Your score is a number based on that report. Scores usually range from 300 to 900. A higher score is better.

Read the full guide on our website

What This Means for You

What counts, and where people slip

What helps or hurts a score, according to FCAC:

• Payment history. FCAC calls it the most important part of your score.
• Credit use. Aim to use less than 30% of your total limit. A $5,000 limit with $1,000 used is 20%.
• Age of accounts. Closing an old account can shorten your history and cut your available credit.
• New applications. Several applications close together can hurt.

Where people commonly go wrong:

• Applying for many cards at once. Apply only when you need credit.
• Skipping a payment during a dispute. FCAC says do not skip a payment while you dispute a charge.
• Never checking the report. Errors can be the reason an application is declined.
• Paying for a "free" score. Some companies require a paid signup to see your score. Order from the bureaus.

General information, not advice. Review the official pages before you make a decision.

What You Can Do Now

Four steps to start building credit

1. Order your free report. Equifax and TransUnion both provide it at no cost, online, by mail or by phone. Checking your own report does not affect your credit rating. Equifax: 1-800-465-7166. TransUnion: 1-800-663-9980.
2. Get a starter card. If you have no credit history, FCAC says a secured credit card may be an option. You put down a deposit, and the limit is normally equal to or higher than it. Ask about set-up and annual fees first.
3. Use it lightly and pay on time. Keep your balance under 30% of the limit. Set an alert for the due date. If you cannot pay in full, pay at least the minimum.
4. Keep it open and check again. Keep older accounts open if they have no annual fee. Order your report again before you apply for a big loan, a lease or a mortgage.

FCAC: Order your credit report
FCAC: Improving your credit score

Helpful Resource

The official FCAC credit pages

The Financial Consumer Agency of Canada explains how to order your report, how scores work, and how to improve yours.

• Order your report: Order your credit report (Canada.ca)
• Improve your score: Improving your credit score (Canada.ca)
• Score basics: Credit report and score basics (Canada.ca)
• Starter cards: Choosing a credit card (Canada.ca)

Ordering your report from the bureaus is free. Check that any site you use starts with https before you share personal information.

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