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Understanding Your Canadian Credit Score

Posted by: Sana Arshad Date: September 23, 2019 Category: Blog

As a newcomer, building and maintaining a good credit score is vital. Having a bad score can affect your chances at getting a loan approved, may cost you a potential job if your employer does a credit check, and can even impact your ability to secure rental housing, or own a vehicle.

For immigrants, it is especially important to understand how this affects your financial capability, so you do not spend years missing out on opportunities.

What is a Credit Score?

First of all, let us look into the definition of it. A credit score is a 3-digit number that allows lenders to determine a potential borrower’s credit risk. So the higher the score, the lower the risk is to the lender.

People can't easily verify your financial status or standing from your country of origin. This is why the most reputable way for them to check is through this score.

Do keep in mind is that your personal information like your religion, gender, marital status, etc. have no bearing on your score. However, if you do not regularly make payments, or already have multiple loans, then that can negatively affect your score.

What is an average credit score?

The credit scores for Canadians range from 300 to 900. And the average score is around 650, according to TransUnion.

But your credit score could very over time, depending on your financial behavior and standing, or also dependent on the lending situation. This is because lenders use different methods of calculation that can vary greatly.

A lot of newcomer and immigrant service providers in Alberta and Saskatchewan offer workshops and counselling that can help you. I highly suggest discussing credit scores more with your local newcomer or welcome centre for the community, such as Saskatchewan Open Door Society or Truly Alive Youth and Family Foundation Inc.

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Career Loans provides micro loans and free career and financial counselling for professionals, who have received education or training for their regulated occupations outside of Canada, so they can return to their chosen profession.

 

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