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Newcomer - Building up credit history to over 750 - how?

Discussion in 'Settlement Issues' started by Carmageddon, Jun 2, 2017.

  1. Hi guys, we landed in April's end, got 2 CCs one for me and one for my wife through RBC with 2K limit on each.

    We are actively using them (careful not to go over 35% utilization, so using debit for large transactions), and paying them on time.

    Also have a contract with Rogers and Shaw for Cell, Internet and Cable services - which I am paying all in full on time.

    I have tried to google, but cant find any further information, on the nuances of the credit history algorithms.. I want to know what other actions we can do, to maximize our credit history building to reach 750+? How we do that?
    I am starting to work in 4 days in a Permanent, Full Time position so after 3 months, technically I'd be eligible for mortgage.

    I am looking to understand further how the system works, should I get 1 more credit card? a loan? Is there some calculator or simulator to do different actions and see what credit scores it results for, and that way figure out what actions to do next?

  2. For a newcomer, what's the point of getting CC when you only use up to 35 percent of the credit limit in a monthly basis? Also, even people without Canadian credit history can be eligible for a mortgage.
  3. The most important way to ensure a speedy increase in your credit rating is to pay your bills on time every time.

    The second way is to focus getting credit on which your activity is reported regularly to credit bureaus. These include mainly :
    - Credit Cards
    - Car loans
    - Personal loans
    - Overdraft facilities
    - Mortgages

    Be careful about applying for credit, every time you apply for credit your score takes a hit. The more you take the more it seems you need it. Downs your score. Plan it carefully.

    Overall credit utilisation 25-35% looks pretty good. Pay your credit card in full every month if you can.

    Do not be afraid to have credit facilities. Credit bureaus like people with debt, and like people that are able to service their debt. Not having debt will not help you score if anything will damage it significantly.

    No matter what you do it will likely take at least 2 years to get to 700+ (most predictions tend to be 3).

    Hope this is helpful.
    Clorets90 and Scorpman21 like this.
  4. Sir you mean applying for credit card or a loan that will hit the score?
    Thank you.
  5. If your goal is to secure a mortgage with favourable terms I'd consider visiting a mortgage broker to see what kind of mortgages are available based on your situation and whether you would have to wait longer to get better terms like a full year of employment.
  6. #6 BC4life, Jan 18, 2019 at 8:51 AM
    Last edited: Jan 19, 2019
    The hit to your score when applying for new debt is temporary, so I wouldn't overthink that.
    A big part of the credit score is tied to the age of your credit file (credit history). As a newcomer you will just need to be patient and give it time.
    Credit score algorithms are not public as otherwise people would game it. You can however find relevant information on credit monitoring sites such as creditkarma.ca or borrowell. One example is this one https://www.creditkarma.ca/credit/i/main-factors-that-determine-credit-score/

    I have been told that the fastest way to get to a high credit score is to be added as authorized user of someone who had an excellent score (such as 20 years history, 840+ score). But for most people this is not an option.

    I came a year and half ago and have close to 750 with Transunion and a little bit less than 700 with Equifax. My credit file shows three credit cards, my osap loan, my Virgin Mobile account. But I know someone who got over 800 in less than two years having only a single credit card.
    xyris87 likes this.
  7. I'm above 750 with less than 12 months of landing here- Have just 1 credit card, Bell home internet, and Telus Mobile (switched over from Virgin as a result of a corporate offer).
    BC4life and xyris87 like this.
  8. I have one credit card to my name, and my score was languishing at 693. I got a job, and asked my bank to increase my credit limit. That was an immediate boost to my credit score. I did not bother too much about utilization, because as advised by someone, its better to keep all your spending on your credit card, to minimize any theft liabilities. Debit cards are directly linked to your bank account, and are potentially unsafe. Getting back money from identity theft on a debit card is considered very hard. So stick to a single credit card. And like the others said, make your purchases on time, and in full. I have spent less than 6 months in Canada, and my score is 724. (only as per my bank. Could be higher if checked with Transunion or Equifax, but I don't want to check my credit score which may bring it down.)
    BC4life likes this.
  9. As a matter of fact, soft inquiries(checking your credit score via Equifax/TransUnion) don’t impact the credit score.
  10. Great point about using credit cards instead of debit cards. Not only that the debit cards directly withdraw from your bank account, but they do not have the zero liability protection and transaction dispute/chargeback options of credit cards. While having a single credit card is good enough in most cases, having a backup card can also help. Some stores for instance only accept Mastercard, so having a Visa and a Mastercard would help avoid cases where one is denied (or simply not working).

    Transunion allows for one credit report application for free per year. This will not affect your credit score. You can also sign up at CreditKarma (Transunion) and Borrowell (Equifax) to obtain free updates on your scores (CreditKarma is weekly or so, Borrowell monthly). These count as soft inquiries and do not affect your credit scores. Keep in mind that the scores at those sites might differ from the actual score with the bureaus, but at least it gives you an indication about where you stand; when new accounts (loans, credit cards) or even hard inquiries appear on your credit file, you receive alerts so this can also help to protect against fraud.
  11. Those “credit scores” are another bluff out of many that we can find in the present day Canadian society.

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