By: Nero Porlas
Everyone aspires to gain credibility and this could not be more relevant than when you move to a new country. As a newcomer, it’s important to think about establishing your financial credibility as you restart your life in Canada. There are numerous challenges as you adapt and integrate into your new home.
One of your top priorities, of course, is a job search. Many newcomers are highly skilled and experienced professionals who often face accreditation barriers to practice in a regulated profession. These may include acquiring additional accreditation in your area of practice.
ACCESS Capital Community Fund empowers immigrants like you to continue working in your profession through to the completion of required Canadian certification. The Foreign Credential Recognition (FCR) loan is a low-interest loan available to newcomers pursuing Canadian training and licensing. As part of the application process, your credentials, character and financial situation are considered. Although the FCR program provides the flexibility to apply for a loan without a Canadian credit history, and will help you build your credit, it’s still important to focus on building your overall credit standing.
Here are a few tips that can help you to reach this goal.
Apply for credit accounts such as a mobile phone line or credit card, having one or both enables you to start establishing your credit quickly. A mobile phone line is essential nowadays and is the fastest way of starting a credit record. Make sure to choose a plan that fits your needs and budget. You can also apply for a credit card with banks. Most banks offer newcomer packages with a pre-approved credit card regardless of your employment status. If you are unable to get a credit card and a good rate through the newcomer offer, you can apply for a secured credit card, this involves placing a deposit amount as security for your desired credit card limit. Limit your credit applications though to one or two as multiple credit checks which are required each time you apply for a card, may have the effect of lowering your credit score.
Pay on time and in full. Your credit score depends a lot on your payment history. It is best to show that you pay the minimum amount on time, but whenever possible, try to cover the full amount as paying in full is an indication of responsibility, it also avoids high interest rates. Keep an eye on your due dates and save enough cash to pay your bills on time. The last thing you want is an accumulated debt instead of a clean report.
Monitor and adjust usage against credit limit, which also affects your credit score. To manage this, track your credit card expenses and keep your usage at low levels or below the recommended 30% of your limit. For example, charge only $300 of monthly expenses out of the $1,000 limit. Remember this to build and maintain a healthy credit score. This approach demonstrates that you can manage your finances and that you do not need credit all the time. Essentially, you are proving to the lenders that you can be trusted to pay your loan obligations in the future. Credit score alone, however, is not the single-most crucial factor for your loan applications, but it helps paint a picture of your overall character and capacity for managing credit.
Building credit requires good credit behaviour over time. It does not happen overnight. Good credit enhances your credibility to borrow for your education, mortgage, and other endeavours. It prepares you well for new opportunities and future financial plans. Poor credit, however, will get you further behind in your life goals. Make it your priority to build and nurture your credit. This is one of the many important steps you can take as a newcomer and is a pathway to help you achieve your personal and professional goals.
If you’d like to learn more about the Foreign Credential Recognition Loans program at ACCESS, visit (https://accessccf.com/
To learn more about credit, refer to our past webinar with Equifax (https://accessccf.com/
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