Whether you’ve just arrived in Manitoba or plan to do so soon, there are likely a few big purchases you’ll make once you arrive. As in most places, you’ll need a loan to purchase a vehicle or a house – but maybe this is the first time you’ve been introduced to the terms “credit score” and “credit history”. Your previous country may have had a different system for evaluating credit and being approved for a loan, so it may take some time to learn.
What is a credit score in Canada?
Your credit score is the three-digit number that determines your financial reliability as a lender. Your score can range from 300 (poor) to 900 (excellent) with good credit sitting around the 650 mark. The higher your score, the better rates and financing opportunities you’re likely to get as a lender.
That being said, if you’re new to Canada, you likely haven’t had a chance to build your credit history. Your credit history is a record of your loans/debts that showcases your ability to repay them responsibly over the years. The longer your history of good repayment, the better your credit score will be.
When you move to Canada, you can start building your credit almost instantly – and we’ll tell you how.
Tips to increase your credit score
Apply for a credit card
One of the easiest ways to build credit is to use it! By taking out a credit card and making your payments on time, you’ll be able to build your credit in a relatively easy way.
There are a few credit card options you can consider:
- Unsecured credit card. As a new immigrant, you should be able to get an unsecured credit card from your bank of choice. Typically banks will offer you a lower line of credit to get you started so you can build your credit history.
- Secured credit card. If you’re unable to get an unsecured credit card without a credit history, you may be eligible for a secured credit card. The difference with this card is you’ll be required to pay a refundable security deposit that’s usually the same amount as the card’s credit limit. With this card, your payment habits will be reported directly to the credit bureau which can be a bonus if you’re trying to improve your credit quickly.
Pay your credit card on time
As common sense as it may sound, paying your credit card on time, every time, is an easy way to boost your credit as it shows you’re responsible enough to consistently make your payments. To a lender, you’ll be considered a reliable borrower. On the flip side, lenders will interpret missed payments as irresponsibility and will be more hesitant to lend you money. Consistent missed payments will also damage your credit score, so it’s important to pay your credit card on time.
Pay off the full balance of your credit card
To avoid having your debt become unmanageable, it’s a good idea to pay the full balance of your credit card each month. If you only pay the minimum amount, your debt will be carried into the next month and you’ll end up paying more interest over time. Try not to use more than 30 per cent of your available credit in order to keep your costs down. If you’re unable to pay off your credit card, you’re spending more than you can afford. Keep an eye on it so you can live within your means and you’ll be good to go.
Pay your bills on time
Paying your other bills on time may not directly impact your credit, however it’ll help you build good habits and prevent you from missing payments (which would negatively impact your credit).
Take out a car loan
Like we said earlier, you have to use credit in order to build credit. A great way to do so is take out a vehicle loan! Having a vehicle loan with regular payments will give you a chance to build your credit and show lenders they can count on you.
How to buy a car in Manitoba as a new immigrant
If you’re a newcomer wanting to build their credit score, a car is a great way to do so. We know there are some things you’ll need to gather in order to purchase a vehicle so let’s go over them.
What documents do I need to buy a car in Manitoba?
The top three pieces of paperwork you need to buy or lease a car in Manitoba are:
- A valid Manitoba driver’s license
- A valid car insurance policy
- Vehicle registration
Valid Driver’s License
Depending on where you immigrated from, you may be able to transfer over your license — either fully or partially. Manitoba Public Insurance requires three pieces of acceptable identification to determine the class and stage of license that will transfer over. The first piece needed is your foreign driver’s license and it must include the following information:
- Your full name and birth date
- The country and licensing authority that issued your license
- Your class or type of license and a description of the type of vehicles you’re allowed to drive
- When your license expires
- How long you’ve had your license (including the date it was first issued, if you’ve had your license for less than three years)
The other two pieces of identification you’ll need are your Canadian Citizenship (or permanent residency) card and an official driver record document or letter. To obtain your driver record you can contact your Consulate or Driver and Vehicle Licensing Agency, depending on where you are originally from.
If your foreign license or supporting pieces of identification are in a language other than French or English, you will have to provide the original license with a certified translation. You can find more information about this on Manitoba Public Insurance’s website.
Note: Your driving record is not necessary to get a license in Manitoba, but if you would like to fully or partially transfer over your foreign license, skipping graduated licensing, it’s mandatory.
Car Insurance Policy
Before you can get car insurance, first ensure you have a valid Manitoba driver’s license. To obtain insurance, there are only two things you need to supply:
- The driver’s license numbers for everyone who will be using the car (must live in the same household)
- The make, model, mileage and registration number of your vehicle.
To complete your legal ownership of your car, you need to register it with the provincial government of Manitoba.
In order to register your car, you need the following:
- Your Manitoba driver’s license and the 15-digit registrant identification number (RIN)
- Proof of your current insurance policy
- Certificate of sale and ownership title also known as the “pink slip”
- Your license plate number
If you’re buying a used car you will also have to include:
- A valid Certificate of Inspection (COI)
- Transfer of Ownership Document (TOD)
- The bill of sale
Once you have all the necessary documents, you can register your car with an Autopac agent at your nearest Manitoba Public Insurance.
Car loans for new immigrants to Canada
At Birchwood Credit, we want to help new Canadians find reliable transportation and increase their credit score. We recognize there may be obstacles that make it challenging for you to get approved for auto financing at other banks and lenders. However, at Birchwood Credit, we specialize in helping car buyers with less than perfect credit (and even no credit history) get an auto loan with terms they can actually afford. We’re here to help you drive away in an affordable vehicle! Get started today.