Canada has a well-established financial system with over 88 banks, trust companies and private lenders. Most consumers carryout their day-to-day banking through one of five “major banks”: Royal Bank of Canada (RBC), Toronto Dominion (TD), Bank of Nova Scotia (Scotia Bank), Bank of Montreal (BMO) or Canadian Imperial Bank of Commerce (CIBC).
These institutions provide basic banking services such as savings and chequing accounts and credit cards. While banks issue insurance and mortgage loans, it is recommended you work with insurance and mortgage brokers. The role of a broker is to assess all of your options in the Canadian marketplace, not just the options available through one bank, institution or insurer. This is particularly important for newcomers, as lending policies can be quite limited when it comes to the newcomer and immigrant community.
Getting yourself set up
Step 1: Contact your nearest immigrant settlement – In Nova Scotia, The Immigrant Settlement Association of Nova Scotia (ISANS) is an excellent place to help you get started. They provide language, employment, business and community-based resources to help you settle in your new home. Check them out here: https://www.isans.ca
Step 2: Apply for a Social Insurance Number – commonly referred to as a “SIN”. Having a SIN number is a legal requirement in order to work in Canada, even if you have a work permit. A SIN will also allow you to access various government benefits and programs. To get a SIN, you need to apply through Service Canada: https://www.canada.ca/en/employment-social-development/services/sin/reports/apply.html
Step 3: Open a bank account – In Canada, everyone has the right to open a bank account regardless of whether you have a job. You will need to visit a bank branch in person, and present two pieces of government issued ID. Check here for a list of acceptable identification: https://www.canada.ca/en/financial-consumer-agency/services/banking/opening-bank-account.html
Step 4: Apply for a health card. In Canada, your health card is connected to your home province. As soon as you have a Canadian address and are eligible, you should apply. In Nova Scotia, you’ll do that here: https://novascotia.ca/dhw/msi/
Developing a financial history in Canada: About credit scores
Now that you have taken care of the most urgent steps, you need to begin the process of building a financial identity in Canada. Without credit history, and a reasonable credit score, you will have difficulty applying for a mortgage loan.
To learn all about credit in Canada, check out: www.consumer.equifax.ca Spend some time reading about credit scores, and how they are determined. Your score becomes a very important factor when you make the decision to purchase a home. In some cases, a low score can prevent you from purchasing the home you want so it must be carefully managed.
How to build credit
One of the quickest ways to build Canadian credit history is to get a credit card. There are financial institutions that will provide cards to new applicants looking to build credit. They may require you to pay a deposit. Make sure you are comfortable with the interest rate – we suggest doing your research and asking an immigrant settlement agency if you need advice. They will help ensure you are not being taken advantage of.
Once you receive your credit card, it is important you manage it properly. Read through equifax’s “Education & Support” section to learn the basics of managing credit: https://www.consumer.equifax.ca/personal/education/credit-score/ The longer you have credit, and the better you manage it, the lower your cost of future borrowing will become. A common mistake newcomers make is not using their credit card, or only using it for emergencies. In order to build your credit history, you must frequently use your card…but remember to pay any charges off before you incur unnecessary interest.
Another great way to build credit quickly is through opening a cell phone account with a Canadian provider. They will need identification and may require proof of income. A common mistake many make (including Canadians) is delaying their cell phone payment. Cell phone payments are closely monitored by our credit reporting agencies, so they must be paid on time every month. Doing this will help you build your credit history quickly.
Within your first two months
Apply for the Canada Child Benefit (if you have dependents under 18 years). This is a tax-free monthly allowance for every child under 18, and is based on the parents’ income: https://www.canada.ca/en/revenue-agency/services/child-family-benefits/canada-child-benefit-overview.html
Search and apply for job opportunities, if you don’t already have one. Make sure you understand your Canadian employment rights, this is a great resource: https://www.canada.ca/en/canadian-heritage/services/rights-workplace.html
3-6 months after you arrive
Determine how you are enjoying your current living situation. If you are renting, would you prefer to own property? Would a home better meet your needs than an apartment or condo? Are you comfortable maintaining a property, or would you prefer somebody else do it for you? Are you comfortable with your current rental payment, or do you think you could pay less and get more home?
These are all questions you should begin asking yourself. If you want to become a Canadian home owner, this is the time to book an appointment with a mortgage broker. They will tell you what specific steps you need to take in order to purchase property, how long your funds must be in your Canadian bank account, and how much your mortgage payment, taxes and other costs will be.
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