American Credit If You Want To Move To Canada | Refresh Financial (2024)

American Credit If You Want To Move To Canada | Refresh Financial (1)

With the latest election result in the USA, there has been plenty of talk of people joining us up here in the Great White North for a little poutine instead of staying in the US of A. Canada’s immigration website even crashed due to a surge in traffic on election night!

If you’ve got Canada in your sights and you’re ready to make that move, we welcome you. We welcome you with open arms. There are just a few things you might want to know about your credit history first, eh.

In Canada, we treat credit just a smidge differently than the USA does. For the most part, it’s the same, but the differences are things you will definitely want to know about if you want to start your new life up here with good credit.

Perhaps the most important item to note, is that your credit score cannot come with you. That’s right, you’ve got to leave it at home. If you’ve spent years working towards a near-perfect credit score, it doesn’t matter, you’ll have to start from scratch up here. If you have awful credit, the good news is that successfully immigrating to Canada will mean you leave it behind, but it doesn’t absolve you of your debts. Further, if you have too much debt, you may not be permitted to live in Canada - Canadian immigration officials know how to pick out those running from debt and you can be sure you’ll get denied entry. When and if you ever head back to the U.S., you will be going back to your old credit score, which will have gotten worse if you were avoiding paying back your debts while living up here in the cold.

Now that's out of the way, let's go through how the Canadian credit system works.

1. The Rating System

For credit in Canada, we use a rating system. These ratings are applied to each of your credit products. The lenders who have given you these credit products are the ones who give you your rating, which consists of a letter and a number. The letters you can get are:

I - I means the credit product in question is an installment type of credit, where you pay an agreed upon monthly amount to bring the balance down, with the ultimate goal of paying the entire amount back.

O - This is an open credit account, which you must pay back in full each month.

R - R is for revolving credit, like a credit card, where you have to pay a minimum payment every month and you can keep the credit indefinitely as long as your account is in good standing.

The numbers in your rating can range from 0-9, with 9 meaning you never pay what you owe, 1 meaning you pay on time, all the time, and 0 meaning there is not enough history yet to determine.

On your credit report, you might see R1 next to your credit card. That tells potential lenders that this account is revolving credit and you always pay on time.

2. The Credit Bureaus

Another difference you’ll notice up here in Canada is that we have two major credit bureaus that keep track of your credit score. In the U.S., you’re used to having three.

In Canada, your credit score will range from 300-900, while in America, scores usually range from 300-850. Although they function in very much the same way, in that you’re looking for a high score.

3. Transferring Credit Cards

Some people get confused when it comes to credit cards, though, as many American credit card companies offer credit products in Canada as well. These companies say they offer the ability to “transfer” your credit over to a Canadian account, and though this sounds like it means your credit history will be transferred, it does not mean that. Instead, what your credit card company is offering, is the chance to transfer your credit card to a Canadian version of the same card. You will start from scratch, even if you do this.

There is no way for Canadian and American credit bureaus to share their information about you. You will have one credit history in Canada and one credit history in the U.S.A.

If that’s something you can deal with, then come on up, neighbour! We’ll warm up an igloo for ya!

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American Credit If You Want To Move To Canada | Refresh Financial (2024)

FAQs

American Credit If You Want To Move To Canada | Refresh Financial? ›

Your U.S. credit history and score will not transfer when you move to Canada. You'll need to start building your credit profile from scratch when you move to Canada. Building good credit is important to help you secure loans, rent an apartment, buy a car, and access other financial products.

Do I get a new credit score if I move to Canada? ›

If you're new to Canada, you won't have any credit upon arrival. That's because your credit history from your country of origin — good or bad — won't transfer with you to Canada. Don't stress! There are simple ways to build your Canadian credit score, like applying for a secured credit card or getting a cellphone plan.

Does USA credit score transfer to Canada? ›

Unfortunately, you cannot transfer your US credit history to Canada when you move. The way credit reporting is handled is one of the many minute differences between Canada and the US, so when you arrive in Canada, you must begin building your credit from scratch.

Does your credit reset when you move to another country? ›

Your U.S. credit score won't follow you

Leaving your credit score back in the States may sound appealing if you're hoping to escape your debts by moving abroad.

Can US creditors follow you to Canada? ›

The question that arises is, Does US debt follow you to Canada? The short answer is no, your credit history usually doesn't automatically transfer when you move countries. However, if you have income or assets in the US, the collection process for your debt may commence there.

How can an American build credit in Canada? ›

Steps to start building credit in Canada
  1. Open a bank account. It may not be credit-related, but opening a bank account should be the first step in starting your credit history. ...
  2. Get a cell phone. For many people new to Canada, a cell phone will be the first utility they'll sign up for. ...
  3. Get your first credit card.
Sep 3, 2024

Does American credit matter in Canada? ›

Key Points. Your U.S. credit history and score will not transfer when you move to Canada. You'll need to start building your credit profile from scratch when you move to Canada. Building good credit is important to help you secure loans, rent an apartment, buy a car, and access other financial products.

Can you move to Canada with bad credit? ›

However, don't be deceived into thinking a weak credit score will prevent you from immigrating to Canada. The Canadian government doesn't actually hold your credit score against you when you seek to move to Canada. Your credit score actually won't follow you from your home country, wherever that may be.

Can an American get a Canadian credit card? ›

Canadian credit cards are available to non-residents and newcomers alike. Even without a credit history in the country, you can sign up for a variety of different cards, including store cards, prepaid cards, and secured credit cards.

Can I keep my credit cards if I move to Canada? ›

Moving to Canada

The easiest way to retain your existing Cardmembership status in Canada is to apply for a new Consumer Card online or by phone. Whatever Consumer Card you choose, be sure to provide your international account number when you apply, in addition to the other information listed above.

Does credit score matter if you move to another country? ›

Since such sensitive information is withheld, information cannot be transferred from one jurisdiction to another. Your score and creditworthiness won't automatically apply as a result. Although debts will not affect one's credit score in a new country, they will still affect their score in their original country.

Does your debt get wiped if you move abroad? ›

Your debt doesn't magically disappear when you move, but debt collection does become more challenging for issuers if you leave the country. Because of each country's unique credit systems and regulations, it can be difficult for creditors to track you down.

Does American credit follow you to other countries? ›

Your credit score will not follow you to another country, but your financial situation, including your debt levels and income, will still play a pivotal role. Creditors cannot share your financial information abroad and different countries have different standards for assessing creditworthiness.

What happens to my American debt if I move to Canada? ›

What happens to your debt when you leave the country? Technically, nothing happens to your debt when you leave the country. It's still your debt, and your creditors and collectors will continue trying to get you to pay it back.

Can you move to Canada with debt? ›

There's no law saying you can't move to another country if you have debt—even if it's in collections. But if you've taken on debt in the U.S., you're contractually obligated to pay it, regardless of where you choose to live. Living abroad can make it more difficult for creditors to find you and collect on your debt.

Can American debt affect Canadian credit? ›

Your credit report and credit score don't follow you when you move to another country. But it is important to know that some debts you owe will remain active. Lenders may find it harder to pursue legal action against you when you are in a different country.

Does your credit transfer to Canada? ›

Unfortunately, your U.S. credit history will not transfer to Canadian credit reporting companies when you move. Each country has its own unique credit reporting system with different laws regulating them, so the information isn't shared across borders.

How can I build my credit after moving to Canada? ›

How to build a credit history in Canada as a newcomer
  1. Use KOHO's Credit Building tool. ...
  2. Get a monthly cell phone plan. ...
  3. Ask your landlord to report your rent. ...
  4. Apply for a newcomer-specific credit card. ...
  5. Open a secured credit card. ...
  6. Take out a car loan. ...
  7. Pay off your bills in full every month. ...
  8. Check your credit report regularly.

Does your credit score transfer to a new country? ›

Credit scores, instead, are inherently tied to the financial landscape of the specific country that you reside in. This means that when you move to a new country, you essentially leave your previous credit history behind.

Does Canada have different credit scores? ›

In Canada scores range between 300 and 900, while in the U.S. 850 is the maximum score. In both countries the credit scores are calculated off of five factors: Payment History, Debt Burden, Length of History, Types of Credit, and Recent Searches.

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