One of the biggest financial surprises for newcomers to Canada is that your credit history from your home country does not transfer. Whether you had an 800+ credit score in India, a perfect payment record in the Philippines, or decades of responsible borrowing in the UK — none of it counts in Canada. You start from scratch, with no credit score at all.
The good news: with the right strategy, you can build a solid Canadian credit score within 6–12 months. This guide shows you exactly how.
How Credit Scores Work in Canada
Canada has two main credit bureaus: Equifax Canada and TransUnion Canada. Lenders report your payment history, credit usage, and account details to these bureaus. The bureaus calculate your credit score using a model that ranges from 300 to 900.
The five factors that make up your credit score in Canada:
- Payment history (35%): Paying on time is the single most important factor
- Credit utilization (30%): Keep your balance below 30% of your credit limit
- Length of credit history (15%): Older accounts help your score
- Credit mix (10%): Having both revolving (credit card) and installment (loan) accounts helps
- New credit inquiries (10%): Applying for multiple credit products quickly hurts your score
The 6-Month Path to 700+ Credit Score
Month 1: Open Your Bank Account and Get Your SIN
Open a bank account with a major bank or KOHO. Apply for your SIN at Service Canada. These are prerequisites for everything else.
Month 1: Apply for KOHO Credit Building
KOHO's $7/month Credit Building subscription reports a positive payment to Equifax every month. No hard credit check required. This starts building your credit file immediately. Use referral code 45ET55JSYA when you sign up.
Month 1–2: Apply for a Secured Credit Card
A secured credit card requires a cash deposit (typically $200–$500) as collateral. This is the fastest way to get a traditional credit card without existing credit history. Best options: Scotiabank Value Visa Secured, Capital One Guaranteed Mastercard, or Home Trust Secured Visa.
Month 2–6: Use Your Card and Pay in Full
Use your secured card for 1–3 small purchases every month (groceries, gas, a subscription). Pay the full balance before the due date every single month. Never carry a balance. Keep your utilization under 30%.
Month 6: Check Your Credit Score
At the 6-month mark, check your Equifax and TransUnion scores. With consistent on-time payments, you should be in the 640–700 range. Free credit score checks: Borrowell (Equifax), Credit Karma (TransUnion).
Month 6–12: Apply for an Unsecured Card
With 6 months of history and a score above 640, you may qualify for an unsecured credit card. This unlocks rewards, better limits, and more flexibility.
KOHO Credit Building — The Newcomer's Secret Weapon
KOHO's Credit Building feature is uniquely suited for newcomers because it requires no credit history and no hard inquiry. Here is how it works:
- You pay $7/month for the Credit Building add-on
- KOHO reports a positive payment to Equifax every month
- Your credit file opens immediately and grows over time
- No deposit required, no risk of missing a payment (if you have $7 in your account)
- Can be used alongside a secured credit card for faster results
Many newcomers use KOHO Credit Building for 6 months and then qualify for an unsecured credit card — significantly faster than using a secured card alone.
Secured Credit Cards for Newcomers — Comparison
- Scotiabank Value Visa Secured: $25 annual fee, minimum $500 deposit, converts to unsecured after 12 months
- Capital One Guaranteed Mastercard: $59 annual fee, $75 minimum security deposit, guaranteed approval
- Home Trust Secured Visa: No annual fee version available, $500 minimum deposit
- CIBC Secured Card: Available to recent newcomers, $200 minimum deposit
- Refresh Financial Secured Visa: $12.95/month, designed specifically for credit building
What to Avoid When Building Credit in Canada
- Missing even one payment: A single missed payment can drop your score by 50–100 points and stays on your report for 6 years
- Maxing out your credit card: High utilization (over 30%) hurts your score significantly
- Applying for multiple credit products at once: Each application triggers a hard inquiry that temporarily lowers your score
- Closing old accounts: Length of history matters — keep accounts open even if you do not use them
- Payday loans: These carry extremely high interest rates and can trap you in debt cycles
Getting a Mortgage as a Newcomer
To qualify for a mortgage in Canada, most lenders require a credit score of at least 620 (some require 680+). With the 6-month strategy above, you can typically apply for a mortgage within 2 years of arriving in Canada. The CMHC also has a Newcomer Program that allows lower down payments for recent permanent residents. Read more in our housing for newcomers guide.