How bad access to credit keeps newcomers from getting ahead
When newcomers arrive in Canada, many bring financial responsibility, professional experience, and aspirations for a better future. But despite these strengths, one key element often stands in their way: access to credit.
According to a 2025 TD survey, 92% of newcomers understood the importance of building credit before arriving in Canada. Yet 82% of those who applied for credit faced immediate barriers. For many, these challenges go beyond inconvenience. They directly affect immigrants’ ability to secure housing, buy a car, start a business, and simply build a life in Canada.
This isn’t just about money. It’s about inclusion. And if Canada sees immigration as important to its future, then removing systemic financial barriers must be part of the national conversation.
A cultural shift, and a credit wake-up call
Like many immigrants, I arrived in Canada financially stable. But the Canadian financial system didn’t recognize that.
I grew up in India and the Middle East with a simple rule: never buy what you can’t afford. Credit cards weren’t necessary, loans weren’t encouraged, and financial independence meant living within your means. That worldview shaped my early adult life—until I met my wife, who was born and raised in Ottawa.
I remember one of our early conversations while we were still living abroad. She was confused about why I booked flights through a travel agent. The answer was simple: I didn’t have a credit card. And I didn’t feel like I needed one. To her, this was strange; in Canada, a credit card is a default tool for everything from booking travel to building rewards points. For me, it felt like a way to buy things I couldn’t afford. We weren’t arguing, just coming at the problem from different cultural angles.
Eventually, I applied for a credit card and, like many people who didn’t grow up using credit, I abused it at first. It felt like free money, but that illusion wore off quickly. Over time, I developed a healthy relationship with credit: using it for convenience, managing payments responsibly, and collecting points for purchases I would have made anyway. When we eventually moved to Canada, all of that learning felt like it didn’t matter anymore.
Earning, saving and spending in Canada: A guide for new immigrants
Credit history doesn’t travel
Here’s a truth most newcomers know, but few are prepared for: your financial history doesn’t follow you.
Despite arriving with a strong financial foundation, I couldn’t qualify for a meaningful credit limit. My first Canadian credit card had a limit of $200, barely enough for half a Costco run. It wasn’t that I had a bad credit score. I didn’t have one at all. And building one from scratch took years.
This wasn’t just a minor inconvenience. It affected every part of our lives.
We couldn’t get a mortgage, not because of our income or how much we had saved for a down payment, but because of a lack of credit history. When we finally did qualify, we had been in the country for years and had done everything right: on-time payments, healthy credit utilization, excellent scores in the 800s. But still, I wasn’t seen the same way the system viewed my wife, who had been born and raised here.
Even now, after more than six years in Canada, my access to credit remains restricted. I don’t get offers for balance transfers, lines of credit, or automatic credit increases like she does. Why? Because she has decades of history, and I don’t. The system rewards longevity, not responsibility.
Harder than it should be
The TD survey confirms what I experienced. Among newcomers:
- 31% qualified only for credit limits too low to meet basic needs
- 27% struggled to secure housing
- 24% couldn’t save or invest for future goals
- 66% worried about their Canadian credit history
- 79% found it difficult to start building credit at all
That last stat is crucial. Building credit isn’t just hard, it’s systemically difficult for immigrants. And that’s the problem.
Even though 92% of newcomers say building credit is important, they’re often left without the tools to do it effectively.
Yes, the financial services industry is beginning to acknowledge the unique needs of newcomers, but acknowledgment isn’t enough. It’s like going to a doctor who finally understands your symptoms but doesn’t have a treatment. Empathy without action is still inaction.
If Canada wants newcomers to succeed, we need more than empathy. We need solutions.
Practical tips to build credit as a newcomer to Canada
Through my own journey and many missteps, I’ve learned a few things about navigating Canada’s credit system. Here are some practical tips to help others:
- Start small, stay consistent, and be patient. Canada’s system rewards consistency and time. That’s frustrating, especially if you’ve managed finances successfully for years elsewhere. But patience is key. Start with a secured credit card or low-limit unsecured card. Pay it off in full each month. Over time, your credit profile will build. I know how tempting it is to want it all at once: the mortgage, the car, the financial freedom. But in Canada, playing the long game matters.
- Ask for support—co-signers can help. If you have family or close friends in Canada, don’t be afraid to lean on them. Having someone co-sign a lease or a loan can fast-track access to housing or credit. We didn’t have that option, but I’ve seen others benefit from it. Just make sure both parties understand the risks and responsibilities.
- Look beyond the Big Five banks. Canada’s largest banks aren’t always the best option for newcomers. In fact, fintech companies often offer more creative, accessible, and newcomer-friendly credit-building tools. When we were starting out, these alternatives weren’t as widely available. But today, they’re a powerful option and worth exploring. Some examples:
- Borrowell’s Rent Advantage lets you report your rent payments to credit bureaus, helping you build a record of reliability.
- Koho and Neo offer credit-builder programs specifically designed for people without long credit histories.
- Digital banks often have fewer fees, more transparency, and products tailored to new Canadians.
- Treat your credit like a muscle—exercise it often, but carefully. Credit is a long-term game, and healthy habits pay off over time. Once you have access to credit, use it smartly. That means:
- Keeping utilization low (aim for under 30%)
- Making payments on time (or early)
- Avoiding multiple hard credit inquiries in a short time
- Asking for limit increases once you’ve proven yourself
- Learn the system. It’s not just about the score. Understanding how credit works in Canada is essential. I didn’t realize, for instance, that having just one credit card for a few years wasn’t enough; lenders wanted to see a variety of credit types and a long timeline. That’s something newcomers often learn too late. More key things to know:
- How your score is calculated (payment history, utilization, credit mix, age of accounts, and inquiries)
- How products like secured cards, instalment loans, and utilities affect your score
- Why history matters equally, if not more than income
- Meet with financial advisors, but choose wisely. Many banks now offer newcomer-specific advisors, which is a good start. But make sure they understand your unique journey: your goals, your challenges, your timeline. Don’t be afraid to shop around, ask questions, and compare advice. You’re not just building credit, you’re building trust.
- Don’t blame yourself, but don’t skip the homework. Yes, the system is slow and can often seem unfair, but that doesn’t mean you should approach it blindly. You also can’t change the system overnight, but you can learn to work within it. Do your research:
- Compare financial products
- Visit different branches
- Ask about welcome offers and newcomer programs
- Read the fine print on credit cards
- Track your credit score regularly (you can do this for free)
You’re not alone
Newcomers don’t lack discipline. They don’t lack awareness. They often don’t even lack income. What they lack is access and a system that’s designed to meet them where they are.
While advice is helpful, it only goes so far. The truth is that Canada’s financial system needs to do more to support newcomers. It’s not enough to acknowledge our challenges. We need institutions that design solutions with newcomers in mind.
If you’re new to Canada and struggling to build credit, you’re not alone. There’s no shame in starting from scratch. But the process shouldn’t be this hard. Financial institutions have a role to play not just in welcoming newcomers, but in empowering them to thrive.
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More money advice for newcomers to Canada:
- Credit scores and credit reports: What newcomers to Canada need to know
- 8 financial mistakes newcomers to Canada make—and how to avoid them
- How much income do you need to buy a home in Canada?
- What is the equivalent of fixed deposits in Canada? Finance terms in Canada vs. India
- Buying a car in Canada: 7 tips for newcomers
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