Getting on your financial feet and settling in a new country

settling in a new country

The Toronto Foundation released its annual Vital Signs report this week, offering an in-depth report card on a wide range of topics, including demographics, employment, and housing in Canada’s most populous city.

Perhaps the most interesting number in the report is “51”. That’s the percentage of people living in Toronto who were born outside of the country, meaning more than half of Torontonians are first-generation Canadians. According to Statistics Canada, the country has a foreign population of about 6.7 million, many of whom settled in major cities in Ontario, British Columbia, Alberta, and Quebec.

Toronto is the first Canadian city to hit the more-than-half-milestone, with Vancouver close behind (47 per cent of Vancouverites are new Canadians). Of Toronto’s first-generation Canadians, one-third of them arrived within the past decade.

Nation-wide, the percentage of new Canadians drops to 22 per cent, which is still a significant level of multiculturalism with one-in-five coming from a different country.

Diversity is a source of pride for many, but a recent report from BMO shows that new Canadians are having financial difficulties, and an RBC poll points out that 60 per cent of immigrants have trouble understanding the Canadian financial system, including how to establish and build credit.

Consolidated Credit has put together a list of tips for settling in s new country:

  • Understand your credit rating – If you’re going to make an effort to improve your rating, you need to know what you’re being judged on. Here are the factors that make up your credit score, and how they are weighted: Payment history (35 per cent); Amounts you owe (30 per cent); Length of credit history (15 per cent); New credit (10 per cent); and Type of credit in use (10 per cent). Length of credit history is a relatively small piece of the puzzle, so focusing on making timely payments and keeping your balance under control will go a long way.
  • Get a secured card – Without credit history in Canada, the easiest type of credit card to receive is a “secured” card. These are different from prepaid cards (which won’t help build your score). Secured credit cards usually require a cash deposit, and the value of the deposit typically equals your credit limit. The limits are usually low, but they can increase as you build your credit score.
  • Court the banks – Canada’s major banks recognize the potential value in obtaining a customer for life, so they often roll out special packages for new Canadians including services such as a secured card. In order to minimize their risk, they probably won’t give you a huge credit limit, but it’s a great way to start.
  • Get a retail card – If you’re having trouble getting a credit card, try getting a retail card from a department store or gas station. Regularly charging and paying off balances will help build your credit, but getting behind on payments is dangerous because these cards typically have higher interest rates.

If you want to learn more about making responsible financial decisions, check out Consolidated Credit’s free Personal Finance educational section. If you’re struggling with debt, call one of our trained counsellors today at 1-888-294-3130 for a free debt analysis.

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