This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Majority Of Newcomers To Canada Not Confident In Their Financial Knowledge: RBC Poll

Misconceptions about credit persist among new immigrants

TORONTO, July 3, 2013 /CNW/ - Six-in-10 newcomers (60 per cent) who arrived in Canada in the past year say that they lack financial knowledge, including how to establish and build credit during their first year living in Canada, according to the RBC Newcomer Financial Attitudes Poll. Among those who have lived in Canada between two and five years, 92 percent of newer Canadians found their financial literacy about borrowing options improved.

"We have an opportunity to improve financial understanding for newcomers to Canada when they first arrive and we have a role to play in making sure that they are getting the right advice from day one," said Paul Sy, director, Multicultural Markets, RBC. "Building a strong credit score is important to helping you get established in Canada, particularly when the time comes to buy a car or a family home."

During the first year in their new home country, few newcomers believed that using a credit card would help them establish a credit rating (nine per cent) or make life more convenient (12 per cent). But over time, these newcomers pick up financial knowledge quickly, as they integrate into their communities and learn to use credit responsibly. For immigrants who have lived in Canada for two to five years, they were now more likely to agree that credit cards make life more convenient (59 per cent) and that it's easy to use a credit card to help establish a Canadian credit rating (54 per cent).

"Economically and socially, it is in Canada's best interest for its consumers to be financially literate and practice good financial habits," said Sy.

Demystifying credit for newcomers There are still a lot of misconceptions when it comes to credit use for newcomers to Canada and Sy clarifies the following:
  • Myth: In Canada, your credit rating is affected by your age, income and gender. The higher a person's income, the better that person's credit rating will be. Reality: Your credit rating is based on your record of managing your finances responsibly. Lenders look at how you handle your financial obligations, such as whether you pay your monthly bills on time, carry a balance, or regularly miss payments.
  • Myth: Someone who has a lot of assets in their home country will have a better credit rating. Reality: Although assets are part of the equation, lenders in Canada will also focus on your Canadian borrowing history to assess your creditworthiness. That's why it is important to build your Canadian credit profile early on, especially if you have plans for big purchases, such as a house or car, which typically require a loan. Even smaller transactions, such as renting living accommodations or getting a cell phone, often require a credit check.
  • Myth: When you get married your credit scores are merged. Reality: Credit scores are based on individuals. Any joint application for a loan will be assessed on both partner's credit profiles. As well, any negative or positive reporting will be reflected on each score and could affect your approval or the terms of your loan.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

Chart of I:DJI
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 +1.21 0.06%
NASDAQ 4,828.3250 +15.6170 0.32%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs