The Newcomer _ Spring 2021_ Inaugural Issue

The Newcomer

According to Experian, a consumer credit company, money. It’s best to keep your debt as little as possible. If
credit is the ability to borrow money or access you owe money, it’s important to make active payments
goods or services with the understanding that you to reduce the amount due. Otherwise, this debt will be
will pay it back later. In Canada, credit is really important poorly reflected in your credit score.
and can help you make big purchases like a house and car. The duration of your credit history also has an impact
Credit can also be used to get access to credit cards, phone on your credit score. The longer you are in Canada
plans, and other types of goods and services. Having bad practicing good financial habits, the higher your credit
credit in Canada can be a disadvantage, which is why it’s score will be.
important to maintain a good credit score.

What is a credit score? Your credit utilization ratio also impacts your credit
score. Your credit utilization ratio is calculated by
A credit score is a three-digit number that comes taking how much you currently owe and dividing it by
from information taken from your credit report. This your current credit limit. The lower this number is, the
number shows whether or not you manage your credit better. This number represents the percentage of the
well, and if it would be risky for lenders to let you available credit you have used up. The general rule of
borrow money. Credit scores usually range from 300 thumb is not to use more than 30 to 35 per cent of the
to 900. The lower the number, the worse your credit. available limit on your credit cards to help maintain a
In Canada, good credit scores are usually between good credit score.
660 and 724; 725 to 759 is very good, and 760 and
up is considered excellent. It generally takes about 18 Five easy ways to build your credit:
months for you to build your credit score to the point
that it will be considered when applying for a loan. Now that you have an understanding of what a credit
score is and how it works, here are five easy ways to
What affects my credit score? help build your credit as a newcomer.

Information taken from your credit report has a direct 1. Apply for a secured credit card
impact on your credit score. Information in your credit Credit cards provide you with a set amount of funds
report will be taken from places that have extended that you can use. At the end of the month, you are
you credit. This could include institutions such as the expected to pay back these funds. The better your
bank, your telephone provider, or a car dealership. credit score and payment history, the more funds you
Your payment history is something that directly can access. This is one of the best ways to build your
impacts your credit score. Whether or not you pay credit score, as it’s an important form of credit that
your bills on time is reflected in your score. If you many lenders look at. Because you’re trying to build
always pay your bills on time and in full, you can your new credit history, you want to go for a secured
expect your credit score to go up. If you don’t pay credit card. This is because these cards are easier to
your bills on time, you can expect your score to go get with no credit history. With a secured credit card,
down. If you miss a payment, your credit score will be you put down a deposit that will act as collateral in
negatively affected and will go down. case you don’t make a payment. If you can access an
The amount of debt you have will also impact your unsecured credit card, this is even better, as the interest
credit score. If you have a lot of debt from other rates and fees will typically be lower. The difference
lenders, other borrowers may not want to lend you between secured and unsecured cards is that with an
unsecured one, you don’t have to make a deposit, and
it’s harder to get an unsecured card. You usually qualify

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Succeeding in Canada

for these cards if you have good credit history and soon as possible and ask to set up a payment plan that
good financial health. works for you. Not only is paying your bills on time
At the bottom of this article, you will find links to the important for your credit score, but it’ll also help you
major banks in Canada and their banking services, save money. Sometimes when you don’t pay your bills
such as the credit cards they offer. You can take a look on time, interest is added to your initial balance.
at the links below to find the best option for you! 4. Apply to the Landlord Credit Bureau

2. Apply for a phone This is an alternative option for people who are looking
Applying for a contract-based monthly phone plan for additional ways to boost their credit score. The
is a great and easy way to start earning our credit. Landlord Credit Bureau has partnered with major
These plans are called “postpaid,” which mean that credit reporting agencies like Equifax and TransUnion.
they are paid after the date of use. These are different This partnership makes it possible for tenants and
from prepaid plans, where you pay for the plan before landlords to have their rent payments reflected on
you use it. When you pay your phone bill on time, their credit score. You can report your information
the phone provider reports this to the credit bureaus, to the Landlord Credit Bureau, who then passes it
which helps build your credit history. You can go to a onto companies like Equifax and TransUnion, and
major communications provider, such as Rogers, Telus, these companies, in turn, incorporate it in your credit
Bell, and many others, and apply for a postpaid phone report. If you are paying your rent on time and in full,
plan. The cost of these phone plans varies depending this could be a great option for you. However, this
on what features you get, and they can be as low as service is not free and starts at $29.99/year.
$40 or as high as $200. Some providers such as Telus 5. Use different types of credit
don’t require credit history to open an account, if You can also use various types of credit to help build
you are new to Canada. Moving2Canada, a guide for your credit history. Having different types of credits
newcomers in Canada, has more information on their means having credit with different companies that
site about Canadian phone providers and what they offer different products. For example, having a credit
require. card, a postpaid phone plan, and paying for a car on
3. Pay bills and credit card balance on time a monthly basis are three different types of credit.
Paying your bills on time is one of the most important Having different types of credit helps build your credit
things you can do as a newcomer to build your history faster than having just one. Paying your bills on
credit history. This shows lenders that you are a good time shows that you’re able to handle different types
borrower and that you will pay what you owe, which and amounts of credit.
makes it more likely for them to give you money. Credit is very important in Canada. It can either make
For example, the bank may offer to raise your credit your life easier or harder, depending on your financial
limit from $1,000 to $2,500 if they see that you have choices. Making good financial choices can help set
a good credit history. If you do not pay your bills on you up for success and increase your credit score.
time, lenders will also see this and be more likely to Don’t let a bad credit score prevent you from making
say no or set more terms. Even if you can’t pay the important purchases for your life in Canada.
entire balance, making some effort to pay even a small
amount will work wonders for you. If you can’t pay
your bill on time that month, call your provider as

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Resources: ￭￭ Scotiabank: https://startright.scotiabank.com
￭￭ BMO: https://www.bmo.com/main/personal/
Landlord Credit Bureau: https://landlordcreditbureau.
com newcomers-to-canada/
Cell Phone Related: ￭￭ TD: https://www.td.com/ca/en/personal-
A newcomer’s guide to understanding Canadian
cellphones: https://moving2canada.com/cell-phone- banking/solutions/new-to-canada/banking-
plan-in-canada/ options/
Banking/Credit Card Related: ￭￭ HSBC Credit card : https://www.hsbc.ca/
How to choose the Canadian bank for you (for chequing-accounts/offers/account-offer-
newcomers): https://moving2canada.com/best-bank- ntc/?cid=AFF0350907156&siteid=2r.
in-canada/ BjXV0C3c-zxXBVLl2VwNxLffcgmFgUw
Canadian Newcomer Banking Programs (Including
Credit Cards): Secured Credit Cards

￭￭ RBC: https://www.rbc.com/newcomers/credit- ￭￭ Home Trust: https://www.hometrust.ca/credit-
cards-for-newcomers.html cards/secured-visa-card/visa-form/?product=nofe
e&referrer=2611055

￭￭ Refresh Financial: https://refreshfinancial.ca/
credit-building/

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Succeeding in Canada

How to build your business in Canada

MARIA MONTEMAYOR

photo courtesy DOMINIKA ROSECLAY (PEXELS)

As an immigrant, permanent resident, or Canadian ￭￭ https://www.under30ceo.com/10-alternatives-
citizen one of your goals might be to run your to-the-formal-business-plan/
own company in Canada. Maybe you have an
entrepreneurial spirit. Maybe you don’t enjoy working Choose and register your business name
for an employer. Perhaps you have a brilliant business Select a memorable name that summarizes and
idea that you want to bring to life. If you feel like running reflects your brand. If you decide to register as the
a company is your calling, there are several steps you can sole proprietor of your company and are operating it
take to achieve that goal. under your legal name, you do not need to register
your business name. In any other case (partnership
Brainstorm and research ideas or corporation), you’ll have to register your business
name.
In order to launch a successful company, you have Look at financing options
to have a good business idea. Take note of your In terms of financing, adults can apply for funding
skills, conduct market research, examine trends, from government funding programs, while teenagers
and think of ways to enhance existing products and young adults can apply for specific grants or loans.
or offer something new to the market. Attend Another option is to apply for CBC’s “Dragons’ Den,”
entrepreneurial and business events where you a Canadian TV show where Canadians pitch their
can meet like-minded individuals. Find a mentor, business ideas to Dragons (investors), and the Dragons
someone who can help you further develop your decide whether or not they want to invest in them (offer
idea and keep you accountable to your goals. capital).
Obtain business licenses and permits
Create a business plan You may need to obtain municipal, federal, or provincial
licenses or permits for your company. You can check
Once you have developed your idea, you should out BizPal for a list of documents you will need for your
start writing a business plan. A well-developed business.
plan is clear, precise, thorough, and easy to review. Register for a GST/HST account
Investors, lenders, and bankers should be able to see Unless your business’ gross earnings stay under $30,000,
how you will organize, manage, and grow your new you will need to register for a goods and services tax
company. (GST) and harmonized sales tax (HST) account. If you
don’t register, your company will incur tax penalties for
Resources for creating a business plan: not filing GST/HST returns.

￭￭ https://www.bdc.ca/en/articles-tools/start-
buy-business/start-business/create-effective-
business-plan

￭￭ https://businesslink.ca/business-idea/creating-
a-business-plan/

￭￭ https://www.shopify.com/blog/business-plan

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Open a business bank account In order to apply for the program, the immigrant must:

A business chequing account can help you manage and ￭￭ Get a letter of support from a designated
keep track of your company expenses and deal with any organization — convincingly pitch your idea to
tax or legal issues. one or more venture capital funds, angel investor
Promote your business groups, or business incubators.
Lastly, once your business is up and running—you’ve
done all the paperwork, received financial support, ￭￭ Have a qualifying business — you should have over
purchased business insurance, and hired employees 10 per cent voting rights as well as joint voting
(if necessary)—all you have left to do is promote it! rights of over 50 per cent with the designated
Develop and put your marketing plan to action and organization. Once you are a permanent resident,
promote your company across social media channels you need to manage your company, run essential
and other forms of advertisement. business operations, and incorporate the business
Apply for the Start-up Visa Program (for in Canada.
immigrants only)
If you would like to start a company in Canada but are ￭￭ Meet the language requirements — take a language
not yet a permanent resident or Canadian citizen, you test from an approved agency and achieve the
can immigrate to Canada through the Start-up Visa minimum Canadian Language Benchmark (CLB)
Program. The Start-up Visa Program is for innovative requirements for the listening, reading, speaking,
immigrant entrepreneurs with the skills and potential and writing components in either English or
to build businesses in Canada. The business must be French.
able to create jobs for Canadians and compete globally.
￭￭ Bring enough money to settle — provide proof that
you have the money to support yourself and your
dependants. (The minimum amount required is
nearly $13, 000 CAD for one family member. This
amount is updated every year.)

thenewcomer.ca 105

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