Category Archives: New to the Country Car Loans

Car Loans for clients with 9 SIN and new to the country

Getting Credit when new to Canada

I have written on this topic before, and it seems this is a popular topic. Getting credit when you are new to Canada can be a confusing and challenging task. It can leave a person frustrated and defeated. In Canada we use 2 main credit reporting agencies. Transunion is one, and the other is Equifax. Read about the difference of each here. It seems that Equifax is the main credit bureau used when lenders look to grant credit. This, of course, will depend on what you are looking to borrow for. Most mortgage lenders will use both bureaus and use the average. When looking for a car loan in Canada most lenders will use Equifax, depending on where you, and the lender are located. In Calgary most lenders will use Equifax. This being said their are still lenders that use Transunion as the credit bureau source. When applying for credit some lenders will choose to use both as they want to get a good idea of total credit. As a newcomer to Canada I would suggest pulling your credit bureau from your home Country and printing it out. I am not suggesting this will have an influence on getting new credit, but it certainly wont hurt by presenting this to the new lender looking to approve you. I would suggest coming into the country and establishing a bank account right away with a well known institution. When looking into a well established institution your going to want to look at the benefits of each. For Instance, if you are looking to get a car loan in the future and want to establish a trust relationship, then you should look into an institution that provides auto loans, at a dealer level. Their are many institutions that are available to get accounts at, but their are select institutions that have agreements with auto dealers as well. An example of that would be TD Bank. TD Bank is a bank, and also an Auto Finance company. By establishing a relationship at the bank would allow the bank to gain more complex information about you, when you apply for a car loan at a dealership. The dealership would need to be a reputable dealership that has an agreement to use TD Auto Finance services. For instance, when you apply at one of these dealerships they would submit your application to this bank, knowing you already bank with TD. The dealership would then send a message to the bank(through their system), giving the bank a heads up that you are a TD Client. This would allow the bank to make a faster, more informed decision, based on information they can gain access to (internal information). Most banks appreciate their client uses their own products. Where some banks might decline you, your own home bank might approved, based on internal track record.

So, when you arrive in the country print out your home country credit bureau(Experian, Equifax, Transunion). Take the this report to a reputable institution and open a bank account. You will want to sit down with the account manager and ask them if this report will help you in getting new credit in Canada. Some institutions will approve you for a low limit credit card. This will allow you to establish credit in Canada. Another option you should look at it asking your new bank to approve you for a RRSP Loan. This RRSP Loan does not have to be a large limit, but I would suggest minimum $2000. You can ask your bank if this reports to the bureau. If it does, this would go well with the low limit credit card, and would then start reporting to the credit bureau. The credit card would report as “R” for revolving, and the RRSP Loan would report as “I” for Installment. This would create a good mix of credit on your bureau.

If you new bank is not offering any new credit approvals you can always look at applying for a Home Trust Secured Credit Card. I have written on this topic before. Here is a link.  http://credittalk.ca/?p=129

Another option would be to get a new credit car loan in Canada. You would want to ask the lender if they report to the credit bureau. This is a great option for building credit. Even if the rate is high, you can always pay the loan off early, or re finance once your credit is established.

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Just my 2 Cents

-M

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