Canadian Credit Score (Part 2)

Continuing from the previous episode, after we explained what a Canadian credit score is, I believe everyone should understand how important a person’s credit is in Canada. Next, we will tell you how to obtain a credit score and some tips to quickly improve your credit score. Building credit takes time and effort, and improving your credit score requires time and effort, so be patient and develop a good habit of reviewing your financial situation from time to time. Whether you are new to Canada or want to rebuild your credit, understand the key to scoring. I believe you will see your credit continue to rise soon!

1. How to Get a Credit Score?

There are many ways to obtain your credit score, here are some common ones:

A. Apply for a secured credit card
This kind of credit card is actually Taiwan’s financial credit card. You can spend as much as you have in your account. However, unlike Taiwan, you must deposit a sum of money first. Suppose you deposit 500 Canadian dollars, and you can only spend up to 500 Canadian dollars when you spend, it has nothing to do with how much money you have in your bank account! For people who have just arrived in Canada and have no credit history, secured credit cards are a very useful way to establish payment history and personal credit, and the application threshold is relatively easy.

B. Apply for a credit card directly
If you’ve been living in Canada for a while, applying for a credit card and using it responsibly is one of the quickest ways to build credit. The first one is a cash-back card, which means swiping without thinking. The second type is a reward card. Most locals go to the supermarket to buy groceries and cook for themselves, so major banks will offer points that can be used at the supermarket, and you will get multiple rewards. These points can be exchanged for goods or used to offset bills. The third type is the Aeroplan mileage accumulation card, which is very suitable for friends who like to travel and fly around.

C. Student credit card
We all know that there are many international students in Canada, so many banks have also launched credit cards for students. For higher education students over 18 years old, the application threshold is relatively simple and the credit limit is relatively low. It is mainly to help students start during their studies. Build your own credit and manage your own finances.

D. Store credit card
This type of credit card may only be used at designated stores, making it easier to apply successfully. For example, the Canadian coffee shop chain Tim Hortons has launched its credit card. In addition to having no annual fee, points can be exchanged for coffee, dining, etc. In addition, it will also help them build credit history. Recommend it to you who have just come to Canada!

2. Quickly improve your credit score

We already know that credit scores are affected by usage. However, improving your credit score is a marathon, not a sprint. While there is no single fastest way, there are some strategies that can help you improve your score if your score is low. Here are some Here are some good habits to follow that can help improve your credit score:

A. Pay your bill in full and on time
Paying your bills on time is crucial to maintaining a good credit score. Set up automatic full payments or reminders for all of your bills. Don’t just pay the minimum, especially for government agency payments like student loans, car loans, and credit cards. Including your utility bills, cell phone bills, insurance, etc. Late payments can remain on your credit report for up to seven years, so paying on time is one of the most effective and fastest ways to maintain and improve your credit score.

B. Change the mobile phone number to monthly plan
Unlimited Internet data is not common in Canada, so the telecommunications market has always been very competitive, and many are no-contract plans. Many people tend to choose whichever telecom company is cheaper. But if you pay a monthly fee instead, there’s a chance those ongoing payments will show up on your credit report. Not all telecom providers do this, so be sure to check with your telecom provider before applying and make sure they report monthly fees to the credit bureaus before signing up to make monthly payments public on your credit report.

C. Increase credit limit
Increasing your credit limit on something like a credit card can help improve your credit score because it can lower your interest rate. But this method only works if you increase your credit limit without using more of it. For example, if you increase your credit card limit from 1,000 Canadian dollars to 2,000 Canadian dollars, you still only spend 1,000.

D. Pay off debts
High-interest debt can wreak havoc on your credit score and financial health, so it’s crucial to prioritize paying off your debt. By reducing the amount of debt you have, you can lower your credit interest rates and show lenders that you can handle your finances responsibly. Although paying off debt takes time, just make a plan, allocate a budget, and focus on paying it off to improve your credit score.