I’ve finally got a credit card! My own credit card, not a supplementary card from Kip’s account. It is something worth celebrating because as a newcomer to Canada without any credit history, most financial institutions will not approve my credit application. The fact that I am not working and thus have no regular source of income makes it even harder to obtain credit.
In Canada, in order to borrow money from a financial institution, you will need a Canadian credit history. A credit history is your record of borrowing money and paying back. The higher your credit score, the better your credit history. The easiest way to build your credit score is by obtaining a credit card. But with no credit history you can’t obtain a credit card! Frustrating, isn’t it? Fortunately the banks offer the option of a secured card. You put down money in an account and you get a credit card linked to that account with the limit being the amount you have in the account. It’s basically a pre-paid credit card.
A department store credit card such as one from Hudson’s Bay Co or Sears is supposedly easier to obtained. I had one from The Bay before but foolishly cancelled it as I didn’t have use for it. Didn’t think about building my own credit history at that time.
At the recent T&T Night Market event, President’s Choice (PC) Financial were promoting their credit card. I applied for it for the goodies they were giving away that day. I didn’t have much hope of getting it. After all I had just been rejected last month by a co-branded card from American Express and Costco and by The Children’s Place earlier this year.
But the good people at PC Financial approved it albeit with a very low limit. They assigned an introductory credit limit to me because they “were unable to locate a complete credit bureau file” in my name. The letter went to explain that this could occur if:
- You were new to credit, or
- You have recently moved to Canada, or
- The information provided on your application did not match an existing credit bureau file
My account will be reviewed over the next 6 to 12 months and they will contact me to increase my credit limit if I have using my card and making regular payments. I don’t think I’ll have any problems with that!
Fast forward 3 months and I have my second credit card and guess what’s my new credit limit? Not twice the limit of my first card, not three times, but five times! Scary, isn’t it?! The application for the second card is much faster and easier now that I already have an approved credit card. All the clerk has to do was swipe my existing credit card and my new application was approved along with the much higher credit limit. I will also be getting my own wireless phone account soon to add on to my credit profile. Yup, I think I’m good now.