Setting Up Your Money as a Newcomer to Canada

1What should I set up first?

You need a SIN to work in Canada and to get government programs and benefits. It’s a private 9-digit number: give it to your employer and the government, but don’t share it with anyone who doesn’t need it.

To open an account at a bank, you show original ID, not copies. You can use two documents from the approved list, one with your name and address and one with your name and date of birth, and a foreign passport is on the list. You may need to visit a branch in person.

2Where should my everyday money go?

KOHO is an app that helps Canadians spend smarter, save faster and build their credit history, with a prepaid Mastercard and helpful financial tools.

Unlike a credit card, the KOHO card uses your own money. You add money to your KOHO account through the app and spend what you’ve added, so there’s no risk of overdraft and no minimum balance.

KOHO members can earn up to 3.5% interest on every dollar in their account. Opt in to Earn Interest in the app; there’s no minimum balance. Interest is calculated daily and paid monthly, and up to $100,000 in your KOHO account is eligible for CDIC protection when Earn Interest is on. The card works wherever Mastercard is accepted, and KOHO is available to Canadian residents.

The table shows KOHO’s plans. Paying for a year up front lowers the monthly price of Extra and Everything. Every plan includes a 30-day free trial.

3Is my money protected?

Each category is insured separately, including principal and interest: deposits in your own name, joint deposits, and deposits held in a TFSA, RRSP, RRIF, RESP, RDSP or FHSA, among others. Money in more than one category can be insured for more than $100,000 in total.

With KOHO, up to $100,000 in your KOHO account is eligible for CDIC protection when you opt in to Earn Interest. If Earn Interest is off, the money in your KOHO account isn’t eligible, so turn it on in the app.

4How do I start a Canadian credit history?

Credit history from another country generally doesn’t transfer, so most newcomers start with little or nothing on file. A thin file can mean a lower credit limit, a deposit on a phone plan or a co-signer on a lease.

Credit Building is designed to help members build their credit history through small, regular payments. KOHO reports your payments to the credit bureaus, and payments can be automated so they’re reported on time. It costs $5 to $10 a month depending on your KOHO plan, and subscribing doesn’t involve a hard credit check. KOHO reports Credit Building payments to both Equifax and TransUnion.

Credit Building doesn’t guarantee an improvement in your credit score. Credit scores depend on many factors, and missed or late payments can lower them.

Other common first steps are a secured credit card, where you leave a deposit as your limit, and paying every bill on time. A prepaid card on its own doesn’t build credit history.

5How do I check my progress?

You can also ask either bureau to mail you a free copy, by form or by phone: Equifax Canada at 1-800-465-7166 and TransUnion Canada at 1-800-663-9980. Look for accounts you don’t recognize and report any errors to the bureau.

Every KOHO plan comes with a free credit score in the app, so you can watch it change as you build your history.

6What mistakes should I avoid?

In provinces that regulate payday loans, the most a payday lender can charge is $14 for every $100 you borrow, which works out to roughly 365% a year on a two-week loan. Most other consumer loans in Canada can’t charge more than 35% a year.

Be wary of anyone who contacts you to say you owe a fee or tax, or who offers a guaranteed loan in exchange for an upfront payment. Government agencies and real lenders don’t ask for payment in gift cards or crypto.