Establishing a Credit History
If you wish to borrow money for significant purchases,
such as a car or a house, you will need a Canadian credit
history. An RBC Royal Bank Visa* card can help
you start building a credit history — and a successful
financial life.
What is a Credit History?
Your credit history is a list of facts, gathered from
financial institutions, utilities, retailers and other
lenders, about how you have handled credit in the past.
Canada’s three central credit bureaus keep track
of how Canadians borrow and repay money, and then create
a credit score for each borrower in the country. Your
good credit score is proof to potential lenders that
you can be relied on to pay your bills and make payments
on time.
When you apply to obtain a loan from a bank or to open
an account with a utilities company, for example, the
company will check your credit history before approving
your application.
Helping You get Established
For people who are new to Canada, one of the easiest,
most effective ways to start building a credit history
is to get a Canadian credit card such as an RBC Royal
Bank Visa card.
As you use your credit card and make regular payments,
you will create a credit history. When you need more
credit later on, your good credit history will help
you achieve a more favourable credit score.
It can take up to 18 months or more to establish a
good credit score, so it’s important that you
start the process as soon as possible.
Why You Need a Canadian Card
Even if you have a credit card from your home country,
there are many good reasons to get a Canadian card:
- It’s a convenient way to shop and pay for
services.
- Credit cards are essential for certain purchases,
such as setting up contracts for a mobile phone, renting
a car or shopping online.
- They enable you to make everyday purchases without
carrying large amounts of cash.
- You’ll make purchases in Canadian funds and
avoid exchange-rate costs.
- You can often use it as a form of identification.
Who Should Have a Credit Card
In most cases, it’s a good idea for each adult
in your family to have their own credit card account.
That way, all of you will be establishing a credit history
that will help you later when you want to borrow a larger
amount.
Alternatively, you can arrange for another person,
such as your spouse, to be a co-applicant on your Visa
card. The co-applicant will receive a separate card
to use, but since you will be the primary cardholder,
all charges will appear on your account and a credit
history will be built in your name only.
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for the general guidance and benefit of our clients.
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