Mike McMahon
Broker
homesbymike@gmail.com

RE/MAX Jazz Inc.
Brokerage
Independently owned and operated

21 Drew St
Oshawa, Ontario L1H 4Z7


Phone: 905-240-4000
Fax: 905-436-1745
Toll: 1-888-732-1600

A good credit rating isn't something that will happen on its' own - it's something you must actively pursue.

 

If you're new to Canada and had good credit back home - try to get a copy of your credit report mailed to you.  It will be very helpful in getting a mortgage and an unsecured (no deposit) credit card.

 

Low interest lenders, like the banks want to see a minimum of two credit cards and one large loan.  The credit cards should have a limit of $1,500 or more,  (the higher the limit the better).  If you have to start with a lower limit and build it up that's fine.  The loan should be for $10,000 or more.

 

If that's not possible ask the bank for a student card.  This card is also unsecured, but the limit will be low to start.  After using the card for six months apply to increase the limit.  Make sure you don't owe anything on the card when you apply for the increase.  Try to get the limit raised as much as possible.

 

The easiest way to start building credit is to get a secured credit card.  This is where you give them a deposit.  They keep the deposit in case you don't pay your bill.  If that happens, they'll pay the bill from the deposit you gave them and cancel your card - you do NOT want that to happen.  If at some time you cancel the card yourself you'll get your deposit back - minus any amount you owe them. 

 

As for Large Loans, if you don't need to buy a car, the best option is to get an RRSP loan (Registered Retirement Savings Plan).  Money put into these plans can be withdrawn for a down payment on a house.  Money put into an RRSP is deductible on your taxes, so if you borrow money for this purpose you'll get about 1/3 of it back on your taxes, which you can then use to make the loan payments.  But not all RRSP loans appear on your credit bureau, make sure you ask first.  You should get a Financial Planner to help you with your RRSP loan.

 

If you are ever in a dispute with one of your creditors, pay the bill, and write on the cheque "paid in protest", and then take it to small claims court to get your money back.  If you win you'll get your money back, plus legal fees, if you lose, the bill is already paid.  Either way, you've protected your credit!

 

Reprinted from previous article by - Lance Humphries

 

 


Mike McMahon Broker

RE/MAX Jazz Inc. Brokerage

Independently owned and operated

21 Drew St, Oshawa Ontario, L1H 4Z7

Phone: 905-240-4000

Fax: 905-436-1745

Toll: 1-888-732-1600

homesbymike@gmail.com

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