Home  Starting Out in Canada Why you need a credit card
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Why you need a credit card |
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How do you build a good credit rating?
- Pay your bills promptly, especially credit cards
- Borrow only what you need and what you can afford
- Try to pay off loans on time and as quickly as possible. Not only
does it help your credit rating, you also save valuable interest costs.
- Even if you are not able to pay off the entire amount owing on your
credit card one month, make sure that you make the minimum payment
specified. Paying off the
minimum ensures is that no red flags are posted against your credit
rating.
The ironic part is that when you are a newcomer to Canada, you
literally have to fight with the bank to get a credit card. But once
you are settled into a job and have bought a car and house, you will
receive a deluge of offers in the mail. You are suddenly not a risk
factor any longer and the credit card companies vie with each other for
your business.
But don't be under the impression that the more credit cards you have
the better your credit rating. In fact, the more you have and the more
times you apply for a new credit card, you show up as a bigger risk on
the central credit rating register.
It is good practice to request copies of your credit report
periodically. This will help you monitor your credit rating as well as
ensure that your credit report is accurate. To obtain a copy of your
credit report, you can contact Canada's credit bureaus:
- Equifax Canada: 1-800-465-7166
- Northern Credit Bureaus Inc.: 1-800-532-8784
- TransUnion Canada: 1-800-663-9980 or 1-877-713-3393 in Quebec
The impications of bad credit: Simply put, if you don't use your credit wisely, you'll end up with a poor credit rating.
With poor credit you'll probably have trouble getting new loans and
credit cards. This may be frustrating when you finally find the car or
house of your dreams. You may also have trouble obtaining a lease for
an apartment or even a cellular phone.
Employers may want to check your credit history before
offering you a job. Remember that every incident of bad credit stays
with you for up to seven years so what you do today will have an
impact on your life later on.
You may not need credit now, but if you don't think ahead, you won't have the option of credit when you need it.
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