Why this matters for newcomers
Even if you had excellent credit back home, it usually doesn't transfer to Canada. You start from zero. Landlords, phone companies, car lenders, and mortgage lenders all check your credit, so building it early makes your next big steps much easier and cheaper.
How credit works in Canada
Your credit history is tracked by two credit bureaus, Equifax and TransUnion. They turn it into a credit score between 300 and 900. Higher is better. Your score is built mostly from two things: whether you pay on time, and how much of your available credit you use.
Five habits that build a strong score
- Get one credit card, either a newcomer card from your bank or a secured card, where you give a deposit that becomes your limit.
- Put one small regular bill on it, like your phone plan, and nothing else at first.
- Pay the full balance every month, automatically. This is the single most important habit, and it also means you pay no interest.
- Use less than about 30% of your limit. On a $1,000 limit, try to keep the balance under $300.
- Be patient and don't apply for lots of credit at once. Each application can lower your score a little. Keep your first card open, since a longer history helps.
Newcomer tip
You can check your credit report for free directly with Equifax and TransUnion. Check once or twice a year for mistakes, especially if your name has been spelled differently on different documents.
Watch out
Be careful with payday loans, “rent-to-own” furniture and electronics, and “guaranteed approval” loans advertised to newcomers. They can carry extremely high costs and trap people in debt. If you need a loan, ask your bank or credit union first.
Your next small step
Pick one. Do it this week.
- Get one credit card and set up an automatic payment of the full balance each month.
- Move one small monthly bill onto the card.
- Put a reminder in your calendar to check your free credit report in six months.
Track it on your first-year checklist →
Learn more
Official, free sources. Always check these for the latest amounts before making a decision.
- Credit reports and scoresFinancial Consumer Agency of Canada
- Free credit report: EquifaxEquifax Canada
- Free credit report: TransUnionTransUnion Canada