Building Credit History in Canada as a Newcomer 2025

Updated March 2025 · bremo.io

One of the most important financial tasks for newcomers to Canada is building a Canadian credit history. Your home country's credit record does not transfer. Starting from zero means you need specific strategies to establish credit quickly and effectively.

Why Canadian Credit History Matters

Your credit score in Canada affects:

• Renting an apartment: Most landlords check credit scores. Without history, you may be asked for larger deposits or a co-signer.
• Getting a credit card: Premium cards require established credit history.
• Car loans: Better credit = lower interest rates.
• Mortgage approval: Banks require minimum credit scores and typically want 2+ years of credit history.
• Cell phone plans: Postpaid plans from major carriers often require credit checks.

How Canadian Credit Scores Work

Canada uses two main credit bureaus: Equifax Canada and TransUnion Canada. Credit scores range from 300 to 900. General benchmarks:

• 300–559: Poor — limited credit options
• 560–659: Fair — some options, higher rates
• 660–724: Good — most standard products accessible
• 725–759: Very good — competitive rates
• 760–900: Excellent — best rates and products

Factors affecting your score:

• Payment history (35%): On-time payments are the most important factor
• Credit utilization (30%): How much of your available credit you use (keep below 30%)
• Credit history length (15%): Longer history = better score
• Credit mix (10%): Having different types of credit helps
• New inquiries (10%): Applying for too much credit at once hurts your score

Step 1: Get a Secured Credit Card

A secured credit card requires a deposit that becomes your credit limit. This is the most accessible starting point for newcomers with no Canadian credit history.

Best Secured Cards for Newcomers in 2025

• Home Trust Secured Visa: $500 minimum deposit, no annual fee option, reports to both bureaus
• Capital One Guaranteed Secured Mastercard: $75 minimum deposit, $59/year annual fee, no credit check
• RBC Secured Credit Card: Available to new-to-Canada customers, reports to bureaus
• KOHO Credit Building: Monthly fee of ~$7 for a credit building account that reports to bureaus without requiring a traditional credit card

How to Use Your Secured Card Effectively

• Make 1–3 small purchases per month ($20–$50)
• Pay the full balance before the due date every month (avoid interest)
• Never use more than 30% of your credit limit
• Do not close the account — length of history matters

Step 2: Newcomer Banking Packages With Credit

Most major Canadian banks offer newcomer packages that include both a chequing account and a low-limit unsecured credit card without requiring credit history. These are often the quickest path to building credit:

• TD Newcomer Banking Package: Includes a TD credit card for newcomers
• Scotiabank StartRight Program: Includes a Scotiabank credit card with no credit history required
• RBC Newcomer Advantage: Includes credit card access
• CIBC Newcomer Banking: Credit card available from day one

Step 3: Report Rent Payments to Credit Bureaus

Rent payments are not automatically reported to credit bureaus in Canada, but you can use services like:

• Borrowell Rent Advantage: Reports rent payments to Equifax
• FrontLobby: Reports rent payments to Equifax and reports consistent payment history

This can meaningfully boost your score, especially in the early months when you have few other credit accounts.

Step 4: Cell Phone Plan

A postpaid cell phone plan (not prepaid) from a major carrier reports to credit bureaus. Paying your monthly cell bill on time each month contributes positively to your credit history. Budget $40–$65 per month for a standard plan.

How Long Does It Take to Build Credit?

Common Mistakes to Avoid

• Applying for too many cards at once: Each application creates a hard inquiry. Space out applications by 3–6 months.
• Missing even one payment: A single missed payment can drop your score by 50–100 points.
• Maxing out your credit: Using more than 70–80% of your limit hurts your utilization ratio significantly.
• Closing old accounts: Keep accounts open even if you don't use them much — the history adds to your score.
• Only using cash: Using cash exclusively means you never build credit history.

Monitoring Your Credit for Free

Check your credit score regularly:

• Borrowell: Free Equifax credit score weekly
• Credit Karma Canada: Free TransUnion score
• ClearScore: Free Equifax score

Checking your own score is a "soft inquiry" and does not affect your score. Review your full credit report annually at equifax.ca and transunion.ca for free.

Transferring Credit History From Your Home Country

Nova Credit (available in some markets) allows newcomers to transfer credit history from select countries (India, Mexico, UK, Australia, Philippines, South Korea, and others) to be used in Canada. Ask your bank if they accept Nova Credit reports during the application process.