Credit scores
How to Build Credit as a Newcomer to Canada
Your credit history from another country usually doesn’t follow you to Canada, so you start from zero. The steps that build a Canadian credit history fastest, from a bank account to a first card.
Does my credit history from another country count in Canada?
Usually not. Equifax and TransUnion in Canada keep files based on what Canadian lenders report, so most newcomers start without a Canadian credit score, even with a long history elsewhere.
Some banks consider your situation, such as your job offer, permanent residence or savings, through newcomer programs instead of a credit score.
Put it into practiceMoney guide for newcomersWhat are the first steps to build credit?
1) Open a Canadian bank account. 2) Get a credit card: a newcomer card from a bank, or a secured card backed by a deposit. 3) Put a few regular bills on it. 4) Pay the full balance on time every month.
Bills in your name, such as a cellphone plan, may also be reported, and some rent reporting services send on-time rent payments to the credit bureaus.
What is a secured credit card?
A credit card backed by a cash deposit, often a few hundred dollars, which usually sets your limit. It works like a regular card and, when the issuer reports it to the credit bureaus, builds your history the same way.
Check that the card reports to Equifax, TransUnion or both. A prepaid card does not build credit.
Which habits build credit fastest?
Paying on time every time, which is the most important part of your score, and keeping your balance well under your limit: FCAC suggests using less than 30% of your total credit limit.
Apply only for credit you need, and space out applications. Several applications close together can lower your score.
How do I check my progress?
Get your free credit report from Equifax and TransUnion a few months after your first card. Checking your own report or score does not affect it. Make sure the details are yours and correct.
Keep reading
Credit scoresBest Credit Cards to Build or Rebuild Credit in CanadaThe easiest Canadian credit cards to get approved for, secured and guaranteed cards, and the habits that raise your score fastest.- Credit scoresHow Long Does It Take to Build Credit in Canada?You need at least one account reported to a credit bureau before you have a score, and a strong score takes longer. Typical timelines, and what speeds things up or sets you back.
BankingSetting Up Your Money as a Newcomer to CanadaYour first 90 days: getting a SIN, opening an account for your pay, keeping your money protected and starting a Canadian credit history, step by step.
Credit scoresEquifax vs TransUnion: Why Your Credit Scores Differ in CanadaCanada has two credit bureaus, Equifax and TransUnion, and your score is often different at each. Why that happens, which one lenders use, and how to check both for free.
Official sources and further reading
- Equifax Canada: how to build credit ↗
- FCAC: improving your credit score ↗
- FCAC: credit report and score basics ↗
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