If you’ve just moved to Canada, you may have heard about credit scores. Don’t worry if it sounds confusing—we’ll explain it in simple terms! A credit score is a number between 300 and 900 that shows how well you manage borrowed money. A good credit score can help you get a loan, rent a house, or even apply for a credit card.
What Exactly is a Credit Score?
A credit score is like a financial report card. It shows lenders how responsible you are with money. It’s based on your credit history, which tracks how you’ve paid bills and managed debt in the past.
Lenders may check your credit score when you:
- Apply for a credit card
- Rent an apartment or house
- Apply for a mortgage (home loan)
- Get other financial services
What Affects Your Credit Score?
Your credit score depends on your financial habits. If you manage money well, your score will go up. If you miss payments or borrow too much, your score can drop.
Here’s what affects your credit score:
- How long you’ve had credit
- Your payment history (paying on time is super important)
- How much money you owe
- How close you are to reaching your credit limit
- Recent credit applications
- Any unpaid debts or bankruptcies
💡 Tip: Your credit score from your home country doesn’t transfer to Canada, so you’ll need to build a new one here.
How to Check Your Credit History in Canada
In Canada, banks and lenders check your credit report to see how you’ve managed money. Credit agencies collect this information and create a report.
👉 Check your credit report regularly to make sure everything is correct. If you find any mistakes, contact the credit agency to get them fixed.
What’s a Good Credit Score in Canada?
In Canada, credit scores range from 300 to 900. Here’s how to understand your score:
- 660 to 724 – Good
- 725 to 759 – Very Good
- 760 or higher – Excellent
A higher score makes it easier to get loans, credit cards, or even rent a home. Your score changes over time based on your credit use.
4 Easy Ways to Build Your Credit Score in Canada
- Apply for a Credit Card
Use your credit card for small purchases and always pay the full amount on time. TD offers special credit cards for newcomers. - Get a Phone or Internet Plan
Paying your phone and Internet bills on time helps your credit score grow. - Pay Loans on Time
Whether it’s a car loan, student loan, or mortgage, paying on time is key to building a good credit score. - Create a Budget
Sticking to a budget helps you avoid missed payments. You can use TD’s online tools like the TD App or EasyWeb banking to track your spending.
Final Tip:
Building a credit score takes time, but small, consistent steps will help you create a solid financial foundation in Canada.
Need more tips on settling in Canada? Contact Ask Kubeir for expert help on your Canadian journey!
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Disclaimer: This is for informational purposes only and not legal advice. Always consult experts like us or the official IRCC website for up-to-date details.