Question about building Canadian credit

[cdnmom]

Canadian financial institutions are able to request foreign/international credit bureaus to assist with obtaining credit in Canada. When applying for mortgage financing when you are new to Canada or for those who don't have a Canadian credit history... You can use alternative forms of credit history... Copy of rental agreement, utility bills, etc...

 

[canadiangirl78]

Excellent! Good for you! Just make sure not leave a balance on it because the interest rate is terrible! Huzzah!

Oh yeah we always pay it off. The advice I was given was to make multiple payments in a month because that helps your credit rather than just once.

 

[canadiangirl78]

It is very easy to get approved for these cards, because the interest is so high, as well as the yearly fee so be careful what you spend on it, as you already owe about 70.00 or so as soon as you get the card!!
I would try going with the Scotiabank, they are very very good with immigrants and offer free accounts for a year etc.
Try to get a little 500.00 loan off your financial advisor, even if it means tying up money....pay it on time and then close it out. This way it isn't a revolving loan like a credit card and shows good on your credit report!

The yearly fee is $58 but we will close it after a year or 6 months when he can get a second card.
We won't be using the card for any purpose other than building credit so we won't be paying interest.
We can check out other banks because this credit card isn't officially open until we give them the security money.
But we definitely didn't want to fork over $1000 again.
Interesting about getting a little loan. Thanks!

 

[canadiangirl78]

Canadian financial institutions are able to request foreign/international credit bureaus to assist with obtaining credit in Canada. When applying for mortgage financing when you are new to Canada or for those who don't have a Canadian credit history... You can use alternative forms of credit history... Copy of rental agreement, utility bills, etc...

I have excellent US credit and it didn't help me at RBC with a credit card, anyway.

I have heard mortgages here are easier to get than in the US. I have also read that new immigrants can get a mortgage but with a hefty down payment.

 

[canadiangirl78]

Td gave me one for nothkng with a $1000 limit which increased to $2000 after a few months! Coast capital also gave me one for free through dejardines at $700.

Nice! We will check out TD and scotiabank before finalizing the Capital One card.

 

[CheshireCats]

Canadian financial institutions are able to request foreign/international credit bureaus to assist with obtaining credit in Canada. When applying for mortgage financing when you are new to Canada or for those who don't have a Canadian credit history... You can use alternative forms of credit history... Copy of rental agreement, utility bills, etc...

That is correct. I remember when talking to our banker a couple months ago about building credit, she did say that some creditors will accept credit histories from other countries...so see what you can dig up!! Major institutions in Canada would accept them for sure

 

[CheshireCats]

The yearly fee is $58 but we will close it after a year or 6 months when he can get a second card.
We won't be using the card for any purpose other than building credit so we won't be paying interest.
We can check out other banks because this credit card isn't officially open until we give them the security money.
But we definitely didn't want to fork over $1000 again.
Interesting about getting a little loan. Thanks!

Scotiabank was extremely helpful!! Scotiabank is one of the 5 major financial institutions in Canada and of the 5 it's close to the lowest in rank.
They will work hard for your business!!!

Having said that, a small local Credit Union can perform the same duties, help you establish credit and can probably offer you much more, so there's something else to look into!

 

[tuyen]

Good to hear we can get a mortgage after one year of Canadian credit

Very unlikely to happen. If both you and your husband lack a sufficient credit history with a high enough FICO score, you're not likely to get a mortgage until you have established a minimum credit history of 2-3 years. The only way you'd get a mortgage with only one year of credit history is if you have a very high income, or you're able to put down a significant portion of the mortgage as a down payment.

The yearly fee is $58 but we will close it after a year or 6 months when he can get a second card.

Do NOT close it. That will negatively impact your credit rating. Keep the account open, but with a zero balance, and use it only when and if you need it. But don't close the account.

We can check out other banks because this credit card isn't officially open until we give them the security money.
But we definitely didn't want to fork over $1000 again.

If you've already applied (and were approved) for Capital One, that means they already pulled your credit profile. I would recommend you go with them at this point, because too many inquiries on your credit profile in a short period of time will also negatively affect your credit rating. If you apply for 3-4 different credit cards in a short period of time, then from a lender's perspective, you appear to be desperate for credit, and will be more likely to be denied credit during the next couple of years.

 

[AnaMaria]

Don't close the credit card. You will need history, meaning length of credit, to improve credit score. When you close the credit card, then your history will be gone, affect your score negatively. Some credit cards are easier to get, including retail ones. But they add larger minus points to your credit score. Don't rely on credit cards only. You will need different types of credit, credit card, line of credit, mortgage, etc. in order to improve credit score. Don't max out your credit. Keep the balance as low as 50% if possible.

 

[cdnmom]

For mortgage financing in Canada... the lenders generally like to see 2 tradelines on the credit bureau... meaning 2 types of credit.
They prefer to see at least one from a major financial institution. You should try to use the card regularly and pay off by the due date on the statement... this way you won't pay any interest.... interest free grace days vary depending on the issuer... but most give you 21 days from the statement cut off date until the payment is due.

If you don't have enough savings to pay 20% down... you will have to go through a mortgage insurer... there are 3 in Canada, CMHC being the most well known... With PR you can qualify for mortgage financing with as little as 5% down... as a non-permanent resident you will need 10% for the down payment.

Here is a link from CMHC regarding their new to Canada program... in this fact sheet it discusses credit history and alternative forms of credit history... including leases for rent, utility bills, insurance premiums, etc.

http://www.cmhc.ca/en/hoficlincl/moloin/hopr/upload/CMHC-Newcomer.pdf

Cheers!

 

[canadiangirl78]

Thanks for the info everyone!!

 

[figgy]

capital one gave by boyfriend a $1000 limit card straight away when he was on a work permit. now he has his PR, TD said just come in with it and they will give him a credit card... we just haven't gotten around to doing it yet

 

[Rob_TO]

The yearly fee is $58 but we will close it after a year or 6 months when he can get a second card.
We won't be using the card for any purpose other than building credit so we won't be paying interest.

Is this the Capital One card with the $58 annual fee? Cap One should have many free card available with no fee, which you should get instead. They can't just transfer over your account to a free card, so you would need to apply for a new no-fee Cap One card.

 

[Isometry]

If you've already applied (and were approved) for Capital One, that means they already pulled your credit profile. I would recommend you go with them at this point, because too many inquiries on your credit profile in a short period of time will also negatively affect your credit rating. If you apply for 3-4 different credit cards in a short period of time, then from a lender's perspective, you appear to be desperate for credit, and will be more likely to be denied credit during the next couple of years.

This isn't exactly true. Multiple checks in a short time for the same thing aren't counted negatively--if you're buying a car, and 4 car dealers check your credit score last week, it's assumed that you bought/will buy a car (not 4 cars). What's bad is lots of different kinds of recent checks in a short period, like checks for car loans, for new credit cards, and for a mortgage. Then it's assumed that you're opening a new credit card, buying a new car, and getting a new mortgage all at once, and your score might dip until you've proven you can handle all that.

Canadian financial institutions are able to request foreign/international credit bureaus to assist with obtaining credit in Canada. When applying for mortgage financing when you are new to Canada or for those who don't have a Canadian credit history... You can use alternative forms of credit history... Copy of rental agreement, utility bills, etc...

I'm not sure that this is true. I was told by several financial institutions that my US credit history did not count, even when I printed copies of my US credit reports and brought them with me. Rental history, utility bills, etc may help with a few things that use credit checks (like getting a first credit card, or renting an apartment) but should not impact your credit score at all.

Don't close the credit card. You will need history, meaning length of credit, to improve credit score. When you close the credit card, then your history will be gone, affect your score negatively. Some credit cards are easier to get, including retail ones. But they add larger minus points to your credit score. Don't rely on credit cards only. You will need different types of credit, credit card, line of credit, mortgage, etc. in order to improve credit score. Don't max out your credit. Keep the balance as low as 50% if possible.

This is true, though you want to keep your balance lower (around 30%) if possible. Closing a relatively new credit card with a low limit will impact your credit score less than closing a really old one or one with a high limit. This is because creditors look at length of credit history, as well as what % of your total available credit you're using. Using a lower % of total available credit gives you a higher credit score. Closing an old credit card reduces your total available credit as well as your history, but can still be worth it sometimes.

 

[canadiangirl78]

Is this the Capital One card with the $58 annual fee? Cap One should have many free card available with no fee, which you should get instead. They can't just transfer over your account to a free card, so you would need to apply for a new no-fee Cap One card.

Yes it is. We talked to someone. Because he has no credit, that is the one he was approved for. They would not approve him for a no-guaranteed funds card.