At the beginning of 2023, many friends are planning to settle in Canada. For new immigrants to Canada, they are not sure how to establish a good credit score. Times Global has listed the following 4 methods based on the suggestions of Canadian lawyers to help new friends establish their own credit scores locally.
1. Make regular repayments
After celebrating the holidays, there may be debts on the credit card for food purchases, travel and gift purchases. If you forget to make a payment, or leave a large balance until next year, your credit score may be affected. Payment history, including whether you make regular payments, and use of your credit limit are two of the biggest factors that affect your credit score.
Times Global said that if it can only pay the minimum repayment amount, it will increase the interest rate and require more time to repay. A reminder that you need to calculate your budget first to understand whether you can afford the repayments.
2. Do not apply for credit cards frequently
Applying for new credit cards multiple times in a short period of time will have a negative impact on your score. Each time you apply for a credit card, institutions will conduct strict inquiries on your credit score, which may cause your score to drop. Think carefully before applying for a credit card, especially if you plan to take out a loan within the next few months, such as applying for a mortgage.
3. Increase the credit limit
Times Global recommends that the monthly debt should be 30% of the credit limit. You can ask the card issuer to increase the credit limit of the existing account. A higher limit will reduce the utilization rate.
4. Check the credit report
The credit report records the debt repayment record. The scoring company uses the information to determine the credit rating. If there are errors in the report that affect the score, it needs to be quickly corrected with the relevant card issuer.
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