If you are starting out or starting over, basic credit is important. Without basic credit, you ability to obtain some basic necessities such as telephone service, hydro and cable can be impacted.
If you are not sure if you have a credit history or not sure of what your credit report looks like, you can obtain a copy of your credit report for free by writing to Canada’s two major credit reporting bureaus:
- Equifax Canada Inc. Equifax Canada Inc. Consumer Relations Department, PO Box 190 Jean Talon Station, Montréal Quebec H1S 2Z2, Telephone: 514-493-2314, Toll-free: 1-800-465-7166, Fax: 514-355-8502, email@example.com, www.equifax.ca
- Trans Union TransUnion Canada – Consumer Relations, 709 Main Street West, PO Box 338, LCD 1, Hamilton Ontario L8L 7W2, Telephone: 905-525-0262, Toll-free: 1-800-663-9980, www.tuc.ca
Again there is no charge if you ask to see your report by mail but you may be charged to view this information through the internet.
It is important to periodically check your credit report (one a year is recommended) to ensure that information on the report is accurate and reflects your credit history.
Ways To Establish Credit
There are a number of ways you can begin to establish credit. Remember you must start small and build a history that shows you are responsible and pay your bills on time. Some common things you can do are:
- Establish a chequing account at your bank,
- Obtain telephone, cable and hydro service in your name. You may need to provide a security deposit. However, you can ask for the deposit back after a period.
- Obtain a secured credit card. Ask your bank how it works. Typically, you need to deposit 1.5 times the credit limit with the bank and purchase a GIC. For example to get a credit card with a $1,000 limit, you will need to provide $1,500 of collateral to the bank. Again, after a period you can request your funds back.
- Gas or department store credit cards are easier to obtain and can be good ways to establish credit. Be careful to pay you bills on time because the interest rates on these cards can be much higher than traditional credit cards
Credit cards are excellent tools to establish credit and, if used wisely, can save you money. However, they are the most expensive loan you can take out so be sure to pay your bill before you have to pay interest.