Borrowing Money from Registered Financial Institutions

Borrowing money allows you to buy something now and pay for it later. A credit can be a:

  • Mortgage to buy a house,
  • Loan to buy a car,
  • Line of credit for larger purchases, or
  • Credit card to make everyday purchases more convenient.
  • If you do not pay your bills (like phone, electricity, credit cards, etc.) on time, you can negatively impact your credit score.
  • Make sure you do not make too many credit applications at once. This may have a negative effect on your credit score and affect your ability to get credit in the future.

In order to get credit in Canada, you must have a good credit history. Your credit history is a record of how well you pay the money back to lenders.

This record or your credit is kept on file by at least one of Canada’s three major credit reporting agencies. The credit reporting agencies give you a credit rating and score based on your financial ‘health’. They base the credit rating and score on:

  • the amount of credit for which you apply,
  • how often you apply for credit, and
  • whether or not you pay your bills on time.

Banks and other financial institutions use the information from the credit reporting agencies to decide whether or not to approve a credit or loan you money for which you apply.

How to Get Credit With No Canadian Credit History


If you do not have any Canadian credit history, it may be difficult to get credit from a bank. When you apply for a loan or credit card, most Canadian banks do not consider if you have a good credit history in your country of origin or if you use credit cards from worldwide companies, like VISA and MasterCard.

Here are some ideas of how you can get credit and develop your Canadian credit history:

  • Secured Credit Card: Make a ‘security deposit’ or deposit cash with a credit card company. The amount of your security deposit will depend on the amount of credit you ask for. The interest rates for secured credit cards are usually higher than regular credit cards and they often charge monthly or annual fees.
  • Retail Credit Card: Apply for a credit card from a non-financial institution, such as a gasoline company or a department store. With this type of credit card, you can only buy things from that specific company or store. The interest rates on these types of cards are usually higher than credit cards from banks, but if you pay off the full debt every month, you will not have to pay the interest.
  • Small Loan: Get a small loan from a bank or another lender. Then pay off the loan quickly.
  • Credit Union: Join a Credit Union in your community. If you have an account with them, they may be more open to giving you credit than the larger financial institutions.
  • Joint Credit: Find someone you trust, like a friend or family member, who can share a loan or credit card with you. You are both responsible to pay the bills.
  • Co-signer: Find a friend or family member with good credit history who will cosign a loan or credit card application with you. The loan or credit card is yours, but the co-signer is responsible to pay the bills if you cannot. If you do not pay the bills, this can have a negative effect on the co-signer’s credit history.

If you do not pay your bills (like phone, electricity, credit cards, etc.) on time, you can negatively impact your credit score.

Make sure you do not make too many credit applications at once. This may have a negative effect on your credit score and affect your ability to get credit in the future.

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