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Michael Haan is a Professor of Sociology at the University of Alberta and a thought leader in the area of Canadian homeownership patterns. Professor Haan recently authored a study on the homebuying experiences of Canadian immigrants, which formed the basis for Genworth's Fall 2007 First-Time Homebuyers Monitor.

Establishing Your Credit in Canada - by Professor Michael Haan, University of Alberta

As you begin the journey to homeownership, you'll quickly learn that the strength of your "credit profile" is an important factor in obtaining a mortgage. Also important is the length of your credit history, which for many immigrants, only begins after entering Canada.

Without an extensive credit history in Canada, how can you prove that you are financially responsible?

It's easy. Each time you pay a bill (for your credit card or for a monthly service such as your telephone or electricity), you are establishing a credit rating for yourself. A credit rating is a number or score that banks, mortgage companies, and other lending businesses use to assess your level of financial responsibility.

Paying your bills on time every month contributes to having a good credit rating. If you miss payments, or are often late making your payments, your credit rating is probably not as good - and money lending institutions will consider this when you apply for a loan.

Numerous factors contribute to your overall credit score. They include:

outstanding debt
payment history
severity and frequency of derogatory credit information
the amount of credit you use compared to what you have available

To begin to establish a credit history:

Open an individual savings or chequing account in your name. From this account, your deposits, withdrawals, and transfers will demonstrate that you can handle money efficiently and responsibly.
Applying for a smaller loan demonstrates responsibility, and will positively affect your credit rating over a longer term, once you show that you can make timely and consistent payments.
Other forms of credit include department store and gasoline credit cards. These are generally easier to obtain than major credit cards and, if used responsibly, can also serve to enhance your credit rating.

In short, there is no quick way to establish credit. It is much better to go slowly and develop a strong credit record than to apply for too many credit cards or a loan that is larger than you can handle.

Mortgages are long-term commitments, so appreciate that lenders will need proof of longevity and consistency. But by starting early and being consistent, you'll soon be on your way to homeownership in Canada!

Ask your mortgage professional for a Genworth-insured mortgage today,
or call 1-800-511-8888



Home Why should I consider homeownership? How can I achieve homeownership faster? How can I make sense of the homebuying process? How do I make the most out of the equity in my home? How do I plan for unexpected life events? Are you new to Canada? What products are available to me? Case Studies National Homeownership Education Week Mortgage Quiz Education Videos Assistance Videos	Print Section Michael Haan is a Professor of Sociology at the University of Alberta and a thought leader in the area of Canadian homeownership patterns. Professor Haan recently authored a study on the homebuying experiences of Canadian immigrants, which formed the basis for Genworth's Fall 2007 First-Time Homebuyers Monitor. Establishing Your Credit in Canada - by Professor Michael Haan, University of Alberta As you begin the journey to homeownership, you'll quickly learn that the strength of your "credit profile" is an important factor in obtaining a mortgage. Also important is the length of your credit history, which for many immigrants, only begins after entering Canada. Without an extensive credit history in Canada, how can you prove that you are financially responsible? It's easy. Each time you pay a bill (for your credit card or for a monthly service such as your telephone or electricity), you are establishing a credit rating for yourself. A credit rating is a number or score that banks, mortgage companies, and other lending businesses use to assess your level of financial responsibility. Paying your bills on time every month contributes to having a good credit rating. If you miss payments, or are often late making your payments, your credit rating is probably not as good - and money lending institutions will consider this when you apply for a loan. Numerous factors contribute to your overall credit score. They include: outstanding debt payment history severity and frequency of derogatory credit information the amount of credit you use compared to what you have available To begin to establish a credit history: Open an individual savings or chequing account in your name. From this account, your deposits, withdrawals, and transfers will demonstrate that you can handle money efficiently and responsibly. Applying for a smaller loan demonstrates responsibility, and will positively affect your credit rating over a longer term, once you show that you can make timely and consistent payments. Other forms of credit include department store and gasoline credit cards. These are generally easier to obtain than major credit cards and, if used responsibly, can also serve to enhance your credit rating. In short, there is no quick way to establish credit. It is much better to go slowly and develop a strong credit record than to apply for too many credit cards or a loan that is larger than you can handle. Mortgages are long-term commitments, so appreciate that lenders will need proof of longevity and consistency. But by starting early and being consistent, you'll soon be on your way to homeownership in Canada! Ask your mortgage professional for a Genworth-insured mortgage today, or call 1-800-511-8888

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