How New Canadians Can Build Credit Quickly in Canada

Published June 29, 2025

•

Last updated June 30, 2025

Written By

Lauren Brown

Editor

Edited By

Sara Skodak

Senior Editor

5 min read

Perhaps you just moved to a new country, settled into a new home, and secured a job. The hard part is over now, right? Not quite! To establish a financial foundation, you also need to build a strong credit history in Canada.

Many lenders rely on your credit history, so establishing a strong credit score for newcomers is key to getting approved for everything from car loans to mortgage applications. As a new immigrant, it’s important to establish credit in Canada as soon as possible. Without a credit profile, you may face higher interest rates, larger deposits, or rejected applications.

Luckily, building credit doesn’t take too long. By following just a few steps, you can earn a solid credit score during your first year in Canada.

Why Credit Matters in Canada

A credit score is a 3-digit number that lenders use to determine how likely you are to pay back borrowed money. The Canadian credit system uses scores from 300 to 900. A score above 660 is considered ‘good,’ with a score of at least 760 being ‘excellent!’

Why is credit important in Canada? A good credit score can:

· Get you approved for loans or lines of credit with better interest rates

· Make it easier to rent a house or apartment

· Benefit you when applying for a mortgage

· Aid in securing a car loan

· Reduce the need for security deposits on utilities or mobile phone plans

· Improve your chances of being hired (some employers check your credit score)

Your credit score is your financial reputation in Canada, and it begins to manifest the moment you open your first credit account.

In Canada, there are two credit bureaus monitoring your credit history, TransUnion and Equifax. Once they collect all the necessary information, these credit bureaus create your credit report. Your credit report includes information like how much debt you owe, whether you make your payments on time, and how long your accounts have been active.

How to build credit fast as a Canadian newcomer

There are several ways that you can start to build credit in Canada as a newcomer.

Opening a bank account

Before you can apply for credit, you’ll need a bank account with a Canadian financial institution. Many major banks offer newcomer packages that include no-fee chequing accounts and low-interest credit cards. Oftentimes, they offer financial advice in multiple languages as well.

Opening a bank account gives you access to tools that make it easier to manage your money. It also helps you build credit within the Canadian financial system.

Tip: Look for banks that don’t require a Canadian credit history. For example, open a bank account in Canada for newcomers using Scotiabank’s StartRight program or RBC’s Banking for Newcomers.

Obtain a secured credit card

Need to build credit with no history? Consider using a Canadian-secured credit card. It works just like a regular credit card, except you provide a security deposit (usually $500 to $1,000) as collateral.

Once you have the card, start using it for small purchases—groceries, gas, streaming services—and pay your balance in full every month. This habit demonstrates responsible borrowing and helps you build your credit score quickly.

Remember to use your card responsibly and keep your credit utilization below 30% of your credit limit. Also, make on-time payments every month on each account and avoid unnecessary purchases. Remember, this is about building credit, not taking on credit card debt!

Tip: Two secured credit card options to consider include the Home Trust Secured Visa and Capital One’s Guaranteed Mastercard.

Apply for a newcomer credit card program

Some Canadian banks offer unsecured credit cards specifically for newcomers—even if you don’t have a Canadian credit history yet. These cards often come with:

· Low credit limits (which can increase over time)

· Rewards or cashback

· No annual fees for the first year

It is important to note that to qualify, you may need to show proof of income or a job offer.

Tip: Apply for only one card at a time to avoid multiple hard inquiries on your report, which can lower your score.

Apply for a cell phone plan with monthly payments

Believe it or not, cell phone payments can impact your credit – that is, IF your provider reports them to credit bureaus. Many major companies (like Rogers, Bell, and Telus) report your monthly payments, which means you can build credit with cell phone plans in Canada. To benefit from this, ensure you sign up for a postpaid plan – not a prepaid one – and pay your bill on time every month.

Use your credit responsibly

Just because you qualify for a large amount of credit doesn't mean you should use that amount of credit. When it comes to building your credit score, it’s best to have a credit utilization under 30%. This means keeping your outstanding balance below 30% of your available credit limit. Additionally, using your credit responsibly means paying your bills on time – without exception.

Also, remember not to apply for too many products at once. For example, if you submit applications for three new credit cards, a line of credit, and a mortgage all at the same time, it could hurt your credit score. This is because multiple hard inquiries, which happen when a lender checks your credit report during an application, signal to credit bureaus that you may be taking on too much debt too fast. Numerous hard inquiries in a short period of time can, therefore, lower your credit score and make you appear riskier to lenders. This is especially true if you’re just starting to build credit in Canada! So, what should you do? Instead, space out your applications and focus on managing one or two credit products responsibly at a time. Using credit wisely builds trust with lenders and increases your chances of being approved for products down the line.

Monitoring your credit score

Keeping an eye on your score helps you track your progress and fix issues early.

Fortunately, there are free tools that make credit monitoring for newcomers easy:

· Borrowell (Equifax-based)

· Credit Karma Canada (TransUnion-based)

· Directly from Equifax.ca or TransUnion.ca

Check your score regularly. If you notice anything suspicious—like a missed payment you don’t recognize—contact the credit bureau immediately to dispute the error.

Avoid these common mistakes that could hurt your credit

After you have worked so hard to build a Canadian credit score, it is important to maintain it. While the concept may seem simple, even small slip-ups can set your credit back. These mistakes might include:

· Missing or late payments

· Maxing out your credit cards

· Closing old accounts too soon (the length of your credit history matters!)

· Applying for too many credit products

Also, be cautious when co-signing loans with others. If they miss payments, your credit score could also take a hit—even if you’re not the one using the loan.

Helpful resources for new Canadians

Here are a few places to get more support as you build your credit:

· Immigration, Refugees and Citizenship Canada (IRCC)

· COSTI Immigrant Services

· YMCA Newcomer Services

· FinlyWealth.com’s Smart Money Guides

These organizations can help with everything from financial literacy to employment services and credit counselling.

Conclusion

Building credit as a new Canadian might seem overwhelming at first—but it’s absolutely achievable. Start small: open a bank account, get a secured or newcomer credit card, and always pay on time.

Your credit score is one of the most powerful tools you’ll have for building a successful life in Canada. The sooner you begin the process, the quicker you will see results!

Looking for more financial tips for newcomers to Canada? If so, check out our money-saving plans and our guide to saving money in Canada.

Frequently Asked Questions

How can I establish good credit in Canada quickly?

Building credit takes time. Following the above steps will put you on the right track to building credit as quickly as possible in Canada.

What is my credit score as a Canadian newcomer?

Anyone coming to Canada begins with a non-existent credit score, as you have no credit history in the country. When you have no credit score it implies you have never used a credit card, signed a loan, or had any other credit product.

How long does it take to establish a credit score for a new Canadian?

Most newcomers can build a credit score of ‘fair’ to ‘good’ (660+) within 6 to 12 months by using credit responsibly. But, with consistent payments and a few active accounts – not to mention low utilization – your score will gradually climb.

Remember: Developing a credit history takes time. But it IS worth the wait! Focus on good habits now, and your financial options will expand quickly.