Expat Canadian credit

Hints and tips on getting credit as an expat in Canada

The two most popular reasons expats cite for moving abroad are a better lifestyle and greater economic well being, according to a report from Lloyds TSB International. Although most feel they do enjoy these benefits, they’re not necessarily immediate.

In fact, packing up and moving home can be an expensive and stressful process in the short term. This creates a big demand for credit amongst expats, be it a mortgage for a new house, a credit card for the furniture to fill it, or anything else a new lifestyle might call for. However, the problem in countries like Canada and the United States is that expat access to credit is often restricted, as credit history from a previous home country isn’t always accepted in a new one.

In Canada, almost all banks refuse to recognise any foreign credit history, instead insisting references must come from within Canada itself. This can create a situation in which regardless of your income or assets, Canadian banks are still unwilling to lend credit, even if you only want a low limit card. What’s more, each time you seek credit a record is kept in a central bureau. Excessive requests may further reduce your chances of getting any money. As such, it’s important to be well informed and have an effective banking game plan when moving to Canada.

Some banks will allow you a low limit credit card as long as you provide a deposit. However every penny can count when you’re setting up your new life, and leaving a chunk of inaccessible money with the bank often isn’t desirable or practical.

Another option is to work your way up from a checking account (current account) in the hope of building trust and gaining an upgrade. However, again this might not be an appropriate compromise, and it’s by no means a guaranteed path to credit anyway.

Despite these obstacles, there are companies such as CIBC that do offer credit cards to expatriates without needing a security deposit or prior Canadian credit history. Provided you meet their minimum income and credit criteria you can immediately enjoy the range of credit cards, mortgages and current accounts that they offer.

Other ways to make the process slightly easier include setting up your new Canadian account before you move. This allows you to open a dialogue in advance and also possibly have some of your existing banking history transferred over.

Many banks now have an international presence, and whilst you might not be able to use your domestic bank as your main provider in Canada, they can at least help you with the move. This can also help to smooth the process to a certain extent.

Overall, provided you have a good idea of where to look and how to go about it, getting credit in Canada is certainly possible, and can be reasonably stress free.