How to get a credit card in Canada
Well, you apply. But make sure you apply for the right card and that you have a high chance of being approved. You see, the credit card company will check your credit history, and that can affect your current credit score. So, don't apply for a bundle and hope for the best, as that can make it look like you're at risk of taking on too much debt. The good news: There are many types of credit cards in Canada, including those for newcomers to Canada, students and even those with bad or no credit. Check out our rankings to find the best credit cards in Canada for your situation.
Once you have a credit card you will want to maintain good credit habits, such as paying on time and paying more than the minimum required payment. Here are some articles to help you navigate your first credit card in Canada.
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Why is credit history important?
Say you want to rent an apartment. Your credit history is important because most landlords will want to see your credit score and credit report to judge whether you will pay your rent on time. When you find a place to live, you'll want an Internet connection—and with this, the major providers will ask your credit score.
If you need to buy or rent a car, your credit history will not only determine whether you are approved for a loan, but also what interest rate you are offered: the higher your credit score, the lower the interest rate. Insurance companies may check your credit history before providing cover. And finally, if you want to buy a home, your credit history is the key to qualifying for a mortgage, and what interest rate lenders will offer. A lower rate can save you tens of thousands of dollars over the life of your loan.
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How to build a good credit history if you have no credit history
Credit history is usually built up naturally as people start using credit. In Canada, young people who have reached the age of majority (18 or 19, depending on where they live) can apply for a credit card and start building a credit and payment history.
If you're new to Canada, or if you're a student, graduate or young adult without much of a credit history, your credit score may be low—a barrier to credit approval. It's a frustrating cycle—you need credit history to access credit, and you need credit to build that history. So, what is the solution? Here are a few steps anyone can take to build their credit history:
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