Majority of newcomers to Canada not confident in their financial knowledge:
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
-- 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.
To learn more about how RBC helps newcomers get financially prepared for life
in Canada, please visit: www.rbc.com/canada/index.html.
About the RBC Newcomer Financial Attitudes Poll
The findings were conducted by Environics Research Group on behalf of RBC in
May 2013. Environics conducted a total of 560 interviews among Chinese, South
Asian and other immigrant residents in British Columbia and Ontario who are
first generation and have lived in Canada for up to five years. Interviews
were conducted online and respondents were recruited from an online consumer
research panel. Quotas were applied to represent the different regions and
tenure in Canada to represent the population as closely as possible. A survey
with an unweighted probability sample of this size and a 100 per cent response
rate would have an estimated margin of error of ±five percentage points 19
times out of 20 of what the results would have been had the entire population
of immigrants in Canada been polled. All sample surveys and polls may be
subject to other sources of error, including, but not limited to, coverage
error and measurement error.
About RBC's Welcome to Canada Package
For more than seven generations, RBC has been supporting newcomers by
providing them with resources and tools that make the transition to a new
country seamless. The RBC Welcome to Canada package helps newcomers who have
been in Canada for less than three years with key financial decisions and
includes advice and discounts on products and services, such as a no-annual
fee RBC Cash Back MasterCard to help them start building credit. Consumers
around the world can access information on moving to Canada, including
financial advice checklists and more, at www.rbc.com/canada.
Ka Yan Ng, RBC Communications, 416 974-1794,email@example.com
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CO: RBC Royal Bank
NI: FIN ECOSURV ECO
-0- Jul/03/2013 10:00 GMT
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