Do you know how many years it takes for a new immigrant in Canada to build a positive credit score?
This question was at the center of our recent discussion at the Albanian Youth (NextGen Professionals) event, where field experts shared valuable insights for new immigrants in Canada.
TTT guests that shared their knowledge were:
- Toka Murphy, President of RentProof, a company that helps renters build credit through rent payments.
- Rolandi Treska, Partner at PwC, with extensive expertise in financial consulting.
- Klarita Beta, Director at ScotiaBank, with rich experience in the banking sector.
- Arben Kacanolli, Manager at RBC, specialist in financial services for immigrants.
As Klarita Beta explained, credit score in Canada plays a key role in financial life. A good credit score is your passport to better financial opportunities. It directly affects your ability to get credit, buy a house or car, and even rent an apartment.
What’s Considered a Good Credit Score?
Rolandi Treska informed us that in Canada, credit scores range from 300 to 900. “A score above 660 is considered good, above 725 very good, and above 760 is excellent,” he explained. “But don’t worry if you start with a low score – every new immigrant starts from zero.”
How to build a Credit Score as a new immigrant?
Arben Kacanolli offered some practical advice:
- Apply for a secured credit card.
- Pay bills on time, every time.
- Keep credit card balance under 30% of the limit.
- Don’t apply for too many credits at once.
Usually, it takes about 2-3 years to build a good credit score, but with discipline and good strategy, you can achieve it even faster.
What Should You Avoid?
Toka Murphy highlighted some common mistakes that can harm your credit score:
- Late payments
- Exceeding credit card limit
- Closing old credit accounts
- Applying for too many credits in a short period
Impact of Credit Score on major purchases
All experts agreed that credit score plays a crucial role in major purchases. “When applying for a mortgage or car loan, your credit score can determine not only if you’ll be approved, but also the interest rate you’ll be offered,” explained Klarita Beta.
Tips for Quickly Increasing Credit Score
- Regularly use the credit card for small expenses and pay the balance in full each month.
- Consider a “credit-builder loan” from a credit union.
- Report rent and utility payments to credit bureaus.
- Regularly monitor your credit report for errors.
In conclusion, during this Tuesday’s Think Tank we found out that building a good credit score in Canada takes time, patience, and financial discipline. But as our experts reminded us, the long-term benefits are invaluable. By following these tips and being careful with your finances, you can build a strong financial foundation in your new country.
Remember, every new immigrant in Canada starts from the same point. With good planning and smart financial management, you can achieve an excellent credit score faster than you think.