Credit History: Why is it such a mystery??

[76Fiddlers]

1) How and from where may I be able to get my "Credit Ratings Report/History" in Canada?
2) What is the procedure/how much does it cost?


Sorry to sound stupid, but I dont even know who it is that makes my Credit Report and the reason that prominent Canadian Banks, where I have upwards of $ 17, 000, refuse me a Credit Card; secured or otherwise. It begs the question, 'How can anyone cheat you when you have all their money with you?'

Many kind thanks, in advance.

 

[SenoritaBella]

1. From TransUnion and Equifax - in writing or by calling and requesting the form.
2. You are entitled to one free credit report from each credit bureau each year.

Lenders want to see how reliable you are, that you pay your bills on time over a period of time before they will lend you money. If you are a newcomer, you probably don't have any credit yet. Applying for credit cards with no credit or bad credit often leads to rejection. Also, repeated applications for credit may lower your credit score.

If you have that much in your account, it won't be long before the bank sends you a "pre-approved" credit card offer. I find that banks are more generous when they are making the offer than when you are applying for it. Bank customers have cheated the banks by not repaying their credit card balances or declaring bankruptcy.

Just continue paying your bills on time. Also, you may have more luck with a store card e.g. HBC credit card. But I would recommend waiting 3 - 6 months before you apply for credit again.

 

[ashezzz]

Getting a secured credit card should not be a problem, I got one for myself when I opened my account with TD 4 years back after few days of my landing.

Now there are banks who offer credit cards to newcomers without a credit history, RBC and Scotiabank are few examples, I regularly listen their ads on radio/TV etc.

Also as said by SenoritaBella getting a store credit card like HBC or Sears will be much easier, they usually approve your credit card on the spot, I think you must try for Sears and if they decline, wait for couple of months before applying for any other.
Good luck

 

[76Fiddlers]

Thank you both. Will follow your advice, gratefully ... with kind regards.

 

[Suin]

Now there are banks who offer credit cards to newcomers without a credit history, RBC and Scotiabank are few examples, I regularly listen their ads on radio/TV etc.

I wouldn't trust those ads - I personally know people who got deceived by them. The best option for you is to get a secured credit card (they open gic and lock the sum you'd like to have your credit card limited to) and keep using that credit card and paying all your bills in time, in a year they will release your money and give you a non-secured credit card.

 

[Mike_Thompson]

If you want to obtain credit quick, Canadian Tire is very easy to get approved with. Capital One will approve you but for a $59 annual fee and you can load anywhere from 300-1500 to security if you want. There are some companies that give you a term loan of 5 years for say $5000, which they invest into a GIC on your behalf while you pay monthly to pay the loan off. Upon completion of this, you get the $5000 plus interest minus the monthly interest and a 5 year credit history with installments.

If you take a direct deposit payment of your salary into a bank account, they will be the easiest to deal with as most banks have specials for newcomers and the payroll will make it very easy for you to qualify for credit. I would suggest to open a PC Financial bank account and put your payroll there. CIBC underwrites their PLC(Personal Lines) and Loblaws bank underwrites their credit cards. If you apply for ANY credit card. Just wait 6 months and you can apply to any other place afterwards, not before. Either apply for 1-3 products, then just wait because no one will usually approve you without 6 months history.

 

[steaky]

If you want to obtain credit quick, Canadian Tire is very easy to get approved with.

No, you are wrong. Canadian Tire was one of the first companies I applied for credit but I could not get.

 

[Mike_Thompson]

No, you are wrong. Canadian Tire was one of the first companies I applied for credit but I could not get.

Not too sure why you did. I've had over 60 clients get that first with no credit history at all and build starting with that along with a pc account. All we did was go into the store with a Drivers license, sin and job address and income. About a week later they got their cards around 500-1000 for each of them. I guess everyone's experience is different.

 

[steaky]

About a week later they got their cards around 500-1000 for each of them. I guess everyone's experience is different.

Geeeeez! Only 500-1000? I don't need that! With this low credit, I can't even pay for a a lot of my purchases.

 

[AnaMaria]

Opening up credit cards is negative point to your credit scores but you have to build your credit history to increase your score. But some credit cards offered by retail stores would have much bigger negative points, and some financial institutions which offer easy credit cards seems to contribute more negative points. You should be no problem opening a secured credit card as long as you have status. As long as you have money on hold in your account for credit card, you can increase your limit and after one year, with good credit history, you can remove that cash collateral on hold. Opening many credit cards in short period of time and also closing cards contribute to negative points to your credit score.

 

[newtone]

Opening up credit cards is negative point to your credit scores but you have to build your credit history to increase your score. But some credit cards offered by retail stores would have much bigger negative points, and some financial institutions which offer easy credit cards seems to contribute more negative points. You should be no problem opening a secured credit card as long as you have status. As long as you have money on hold in your account for credit card, you can increase your limit and after one year, with good credit history, you can remove that cash collateral on hold. Opening many credit cards in short period of time and also closing cards contribute to negative points to your credit score.

...also if you try and apply for mortgage, car loan, purchasing high price items on credit is going to get your negative points too

 

[steaky]

Despite what you guys have said, credit history is still a mystery to me.

I got my mortgage even before I have Canadian credit history and/or moved to Canada. When I moved back to Canada, the mortgage and SIN are still running, but when I want to make use of the credit history I built up during my non-resident years to apply for credit cards, car loan, additional mortgage, etc., one by one, my request were all refused. Later I was advised to use my non-Canadian references and this time I was able to get my first Canadian credit card (with a high credit limit - YEAH!). Shortly afterwards, I got the car loan (I used a major portion of the credit limit of the first Canadian credit card to pay for the downpayment), using the first credit card to purchase high price items and then still I got a second credit card (PC). Then I missed one repayment on the PC credit card, repaid it and cancelled afterwards but still I was able to get a Sears credit card (also with a high credit limit - YEAH!). Credit Score/History is so weird in Canada!

 

[seton]

Despite what you guys have said, credit history is still a mystery to me.

I got my mortgage even before I have Canadian credit history and/or moved to Canada. When I moved back to Canada, the mortgage and SIN are still running, but when I want to make use of the credit history I built up during my non-resident years to apply for credit cards, car loan, additional mortgage, etc., one by one, my request were all refused.

Your refusals may have been related to your existing mortgage. If you credit application had no income, but an outstanding mortgage, your earnings to debt ratio would have been very poor.

Additionally, trying to apply for several things in a short space of time would have cascaded into further ruining your credit as each credit application results in an inquiry on your file. Multiple inquiries in a short space of time = poor credit.

Later I was advised to use my non-Canadian references and this time I was able to get my first Canadian credit card (with a high credit limit - YEAH!). Shortly afterwards, I got the car loan (I used a major portion of the credit limit of the first Canadian credit card to pay for the downpayment), using the first credit card to purchase high price items and then still I got a second credit card (PC). Then I missed one repayment on the PC credit card, repaid it and cancelled afterwards but still I was able to get a Sears credit card (also with a high credit limit - YEAH!). Credit Score/History is so weird in Canada!

Credit cards are usually the easiest credit to obtain due to the high interest rates. Sears (and other department) cards also have some of the lowest requirements of all credit cards. The fact that you paid a large downpayment for the car (making the loan smaller) probably made the loan easy to grant.

That said, paying a car downpayment with a credit card balance is probably a terrible idea (I hope you paid the balance off immediately, didn't endure cash advance fees, or had a very low-interest credit card). You should strive to never pay interest on a credit card - go for a line of credit if you really need a revolving debt account.

 

[steaky]

That said, paying a car downpayment with a credit card balance is probably a terrible idea (I hope you paid the balance off immediately, didn't endure cash advance fees, or had a very low-interest credit card). You should strive to never pay interest on a credit card - go for a line of credit if you really need a revolving debt account.

So the credit report will show income? I was reading an online Equifax credit report sample but could not find any income. Could you give me a link where it shows income in a credit report? Yes, I have an outstanding mortgage but I also had income.

I agreed I learnt the hard way - multiple inquiries in a short space of time = poor credit. But ... I still got mortgage, rental apartment, credit cards, etc despite having no or poor credit! So I also agree with many people that credit report in Canada is a joke. If I were to be a landlord and operate a rental apartment or income property myself, I probably would not order credit report from those companies to check my potential tenants.

That said, why paying a downpayment with a credit card balance is probably a terrible idea? As long as I pay the the balance off immediately or pay it on or before the due date, I don't worry if there is any problem. I love using credit cards and would grasp opportunity to use where available, especially if I can use those credit cards that get me instant rebate/discounts or getting points to redeem groceries, gas, etc. Hey seton, don't you use credit card for all these benefits versus to using cash only (except some debit cards such as PC using in stores like No Frills, etc) you otherwise would have no such benefits?

 

[seton]

So the credit report will show income? I was reading an online Equifax credit report sample but could not find any income. Could you give me a link where it shows income in a credit report? Yes, I have an outstanding mortgage but I also had income.

Typo - I meant if your credit application (not report) had no income. i.e. your credit report what state your debt burden, and the income you usually fill out in your application would be weighted to the debt on the report.

That said, why paying a downpayment with a credit card balance is probably a terrible idea? As long as I pay the the balance off immediately or pay it on or before the due date, I don't worry if there is any problem. I love using credit cards and would grasp opportunity to use where available, especially if I can use those credit cards that get me instant rebate/discounts or getting points to redeem groceries, gas, etc. Hey seton, don't you use credit card for all these benefits versus to using cash only (except some debit cards such as PC using in stores like No Frills, etc) you otherwise would have no such benefits?

If you're paying it off in full before the due date (and incurring no interest), then great. Unfortunately many Canadians can't manage Credit Cards effectively and end up carrying debt on the card. Personally I pay everything on credit cards, but I never carry a balance. If you're disciplined, power to you