So if you are a new immigrant moving to Canada already living in Canada today
we're talking about how to build and how to increase your credit score in Canada.
Having a poor or a non-existent credit score living in a country like Canada can make it
very difficult for you to get a mortgage or even a place to rent so having a good credit score
is important so I just got inside from my short little walk and I want us just to break down
how Canada's credit system works so it works on a three-digit scoring system that is between 300
and 900. So if you have a score of 300 that means you have very poor credit and if you have a score
of 900 that means you have excellent credit and are very very low risk when it comes to
defaulting on repayments on any loans or credit that you take out from your financial institution
comment down below how the credit system works where you are from the country that you're
watching in do you have credit that is available to you because I know some countries don't have
any credit and there's a lot of things that you have to do cash which has been quite crazy to
learn about over the years but let me know in the comment section if you are in a country that has
credit doesn't have credit how does it work I'm interested in knowing how it works where you are
now let's talk about five factors that can influence your credit rating or credit score
and the first one that I want to mention is the duration of your credit history now if you are
a new immigrant literally the only thing that you can do about this one is wait the amount of
time that you've had your credit in Canada impacts your score but as a new immigrant the only thing
you can do with this one is all the right things with the other factors that I'm gonna mention
and just wait it out because you can't just automatically add say 18 months to the amount of
time that you've had your credit history so if you are planning in the future to buy something like a
house and you will need to take out a mortgage for it just know that the history and the length that
you've had your credit in Canada is going to make a difference and impact how your score looks the
second factor is your debt utilization ratio now this means if you have a credit card for example
and it's for say six thousand dollars you should try and use less than thirty percent of that
entire amount don't use more than 30% each and every month and one of the most important things
is to also make sure that you are using money that you can pay off every single month that
will influence and impact your credit score in a positive way so it's going to help increase your
credit score because the banks or the financial institutions they can see that you can use your
credit and paid off responsibly and just remember to not stick to that minimum amount so that
minimum due amount and honestly for the longest time living in South Africa I thought that was the
most important thing just making sure that you're up to date with your payments making that minimum
payment but it's important to pay it off as much as you can but if you do have to keep a balance
on it try and keep that balance below 30% of the entire amount that you have available to you the
third factor that I want to talk about is credit diversity it works in your favour if you're going
to have different credit facilities that you're using because it shows banks that you understand
the different options that are available to you and if you can use them wisely it increases your
credit score positively so that could be taking out a car loan to having a credit card and that's
a different form of a credit facility that you could be using it could be a personal loan
maybe you have a car that you're leasing or a car that you've taken out on finance
that all helps to increase your credit score if you are able to diversify the types of credit
that you have the fourth factor that impacts your credit score in Canada is new credit inquiries so
you can have an inquiry if you are trying to find a place to rent your landlord may put an inquiry
in your credit history to find out what kind of a person you are when it comes to managing your
debt are you paying your bills on time and if you would be going to buy a car whether you're
financing it or leasing it that could be something that has that institution put an inquiry into your
credit and it can affect your credit score so it's very important to make sure that you're not doing
too many things that are going to put a lot of inquiries on your credit report around the same
time because that can decrease your credit score and the fifth factor is paying your bills on time
so that is one of the most important things as well that you need to be doing make sure that
you're paying all of your bills on time because it can decrease your score if you are not doing that
now as a new immigrant you don't have credit score you're still trying to build that new credit score
opening a phone bill is one of the first things that you can do open a phone bill start paying
that off every single month and that is going to help you start to build your credit score
another thing you can do depending on the type of place you end up renting you could open up utility
bills you could need to pay utilities and that is another thing that's going to help you build up
your credit score and of course if you do need a car you're not somebody who stays in a place
that has a lot of public transportation that makes it easier for you to move around or you have kids
and getting a car is something that you need to do that is also another thing that you can do and
over time get a credit card you may get a credit card when you have just arrived in Canada for us
we literally got a credit card it was a couple of days after we arrived it was before we had jobs
which was something we were not expecting because we just generally thought you have to have a job
before you can apply for credit like a credit card right and so if you do get one pretty quickly you
may find yourself having higher interest rates because you don't have a credit history yet
so one of the best things that you could do instead of starting off by getting a credit
card is getting a secured credit card now what that means is you are going to give the financial
institution money to put in a card and you will use that card as though it's a credit card
but it's your money in there it's not money that the bank has given you that is safer for the banks
and that's a way that you can show how you would be able to actually use a credit card and help
yourself build that credit history while you are still new in the country and you're still trying
to establish a very good credit record let me know in the comments section whether you are a new
immigrant in Canada or you're still considering moving to Canada which factor I mentioned is
something that you might not have known or if you have more information that you could share
in the comments that could help somebody who is trying to understand how to build their credit as
a new immigrant in Canada drop that in the comment section as a South African living in Canada credit
history was a thing back in South Africa but I've just learned a lot more about the different
factors that influence it than i knew when I was back in South Africa so I'd also be interested to
hear how are you managing your credit does it sound similar to things that you know because
there's probably things I was not aware of that were factors in South Africa. My name is Busi and
I am a South African living in Canada and I will see you on the next video. Thank you for watching!