Tips for new Canadians to build good credit

Building credit can be a tall order for anyone, but there is an extra challenge if you’ve recently arrived in the country. In addition to potentially dealing with language or cultural barriers, there is the matter of establishing your credit history to achieve your financial goals. new canadians

According to a TD survey:

  • Eighty-eight per cent of new Canadians say that establishing good credit is a major priority for them in their first year in the country, but 45 per cent are unsure of where to start
  • Eighty-four per cent of new Canadians wish that they had a better understanding of credit rating and how to build a credit history
  • The top financial priorities for new Canadians include saving for a down payment for a house (51 per cent), saving for children’s education (35 per cent) and leasing a car (35 per cent)

“In day-to-day living, having good credit isn’t just about being able to get approved for loans to buy bigger ticket items. In many instances, you need a solid credit record to rent an apartment, lease a car or take out a cell phone contract. And unfortunately, it can take some time to build up that good credit reputation,” says Jeff Schwartz, executive director, Consolidated Credit Counseling Services of Canada.

“In order to reach your short, medium and long term financial goals, you’ve got to establish good money management practices, including building your credit history right away. In most cases, lenders don’t recognize credit histories from other countries, so you may feel like you’re starting from scratch. But with patience and a plan, you’ll be able to establish your credit reasonably quickly,” says Schwartz.

If you are new to Canada, here are some suggestions on how to build a solid credit history in a shorter amount of time.

Apply for a credit card

Many lenders have programs for new Canadians to help support them through the borrowing process. Depending on a number of variables, including income, investments and cash on hand, you may qualify for an unsecured credit card. You may, however, be required to secure your credit card with cash, so be prepared to do so.

Avoid department store and alternative lending institution cards, which for the most part are at higher interest rates.  This isn’t about getting access to more cash flow through credit. It’s about obtaining a tool to get your credit history going.

Credit musts

Include spending on your credit card every month as part of your budget and pay the balance in full and on time every month. Both of these actions will contribute heavily to boosting your credit score.

Ask questions

The financial business uses a lot of jargon (RRSP, APR, etc.) that may appear confusing. One of the most important steps you can take in establishing yourself financially is to understand your options. If you don’t understand something, don’t be afraid to ask your lender or to consult resources that can help you find answers.

Is building good credit a priority; however you are unsure where to start?  We can help. Contact one of our trained credit counsellors at or visit our free online debt analysis.

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