Don’t make these credit mistakes as a newcomer.

New to Canada and looking for credit? Read our tips first.

If you’re new to Canada, it probably didn’t take long before you realized how important a credit card is here.

It’s one of the primary payment methods among Canadians, and your credit score – the number that represents how responsible you are with credit – is worth its weight in gold (read on - we explain why).

So, ready to apply for your first credit card?

Hold on a sec. Getting a credit card without a credit score isn’t easy. But you have options, like a secured credit card, which allows you to access credit by providing security funds as collateral.

Credit is an important factor in achieving financial success in Canada. But once you’ve got a card in hand, you’ll want to proceed with a little caution. One mistake, like a missed payment or applying for too many credit cards at one time, can set you back – sometimes way back – on your financial journey.

Before applying for your first credit card, we recommend reading these five credit don’ts.

Don’t underestimate the impact credit can have on your future

Having access to credit can not only make your transition into Canadian society a little easier, it can set you up for long-term success, giving you a leg up in your financial planning.

When you use a credit card, your transactions, payments and general activity are reported to the credit bureaus. Each bureau will create a credit report and document your activity over time. They’ll also use your report to generate a credit score which gives lenders a snapshot of your current level of credit worthiness.

Your credit score is typically a number between 300 and 900. Knowing it and checking on it regularly can give you some insight into whether you’ll be approved for a credit card before submitting an application, or if there’s some room for improvement.

With our free online tool Credit Keeper¹ , you can check your score anytime without impacting it. And you don’t need a Capital One credit card to use it.

We’ve said it before, but it’s worth repeating: don’t spend more than you earn. When you’re given a credit limit, it can give you a sense of financial freedom! But that freedom comes with a price.

Credit card companies charge interest on any balances owing past the due date. Those interest charges add up, and if you have a balance on multiple credit cards, it’s easy to lose control of your finances – fast.

Instead, limit the number of credit cards you have in your wallet to one or two, and get into the habit of paying off purchases immediately.

If you have a Capital One credit card, we offer a number of tools that help you stay on top of your account so you can focus on the things that matter most. For example, our Auto Pay feature allows you to set up automatic payments from your bank to your credit card account, and you can sign up for account alerts through our mobile banking app.

Education can give you greater control over your finances. Here are some useful links to help you stay informed:

• 3 ways to keep your credit card safe – find out what information scammers are looking for to try to gain control of your card.

• Protect yourself against identity theft – as cybercrime increases, it’s more important than ever to be aware.

• Fraud targeting newcomers – learn about some of the most common scams.

The sooner you start using credit, the sooner you can establish a solid pattern of making purchases and paying down your balance. As you build your credit history, your chances of being approved for other credit products will improve – provided you’re using your credit wisely. Remember:

• Don’t spend more than you earn

• Stay within your credit limit

• Make your payments on time and try to pay more than the minimum payment

Looking ahead

As Canada’s population grows, Capital One Canada is empowering all residents with valuable financial information. Follow us on Instagram and Facebook to get updates on new blog posts about the economy, your finances and our products and services. Plus, check out inspiring stories from real Canadians who were able to build their credit with Capital One.

^* If Quick Check pre-approves a card, you can be sure we’ll approve your application, except in limited circumstances. Some of the reasons we may not approve your application, among others, include:

a. There’s been a change in your credit file information, personal information or financial status from the time you receive your Quick Check results to the time you apply for one of our credit cards.

b. You’re not at least the age of majority in the province or territory you live in.

c. Your application is flagged for fraud prevention.

d. You have an existing Capital One account.

e. You’ve applied for a Capital One account in the last 30 days or had an account with us that was not in good standing in the last year. In good standing means not past due, over limit, fraudulent, restricted, or part of a consumer credit counselling program or bankruptcy.

In some cases, we may not be able to open an account for you even though your application was approved. This can happen if we’re unable to verify your identity, or you don’t provide the required security funds if you’re approved for a Secured Mastercard®.

¹The credit score and report information by Credit Keeper is intended for educational purposes only. Lenders and other commercial users may use a different type of credit score and other information when making credit decisions.

Credit Keeper is a service offered by Capital One and is powered by credit information provided by TransUnion. Availability may vary depending on our ability to verify your identity and obtain your information from TransUnion.
 
Credit Keeper might be unavailable to some Quebec residents. TransUnion and associated names and logos are trademarks of TransUnion, LLC or an affiliate.