FinviloHow to build credit as a newcomer to Canada
Your credit history from another country usually does not follow you to Canada, so you start fresh. Open a bank account, get a credit card, even a secured one, use a small part of the limit and pay it on time every month. A record builds within months.
First steps
Most big banks offer newcomer packages that can include a chequing account and a credit card without a Canadian credit history.
- Open a chequing account and set up direct deposit.
- Apply for a newcomer or secured credit card.
- Put a small recurring bill on the card and pay the full balance automatically.
- Keep your balance well below the limit; many lenders like to see under about 30% used.
What helps and what hurts
Payment history and how much of your limits you use matter most. Many applications for credit in a short time can lower your score. Rent and phone bills do not always appear on your report, so a credit card is usually the clearest signal.
Check your reports
Equifax and TransUnion are Canada's two credit bureaus. You can get your credit report from each for free and should check both for errors once you have been here a few months.
Frequently asked questions
- Can I get a car loan or mortgage without Canadian credit?
- Some lenders have newcomer programs that use foreign income, employment and a larger down payment. Terms vary, so ask each lender.
- Should I pay a company to build my credit?
- Be careful. FCAC warns about credit repair companies; you can do everything they offer yourself for free.
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Official sources
General information only, not personalized financial, tax or legal advice. Rules change; confirm current details with the source.