Credit history is one of the most important financial tools in Canada, significantly affecting your ability to obtain loans, rent housing, find employment, and even sign up for mobile phone service. Understanding how the credit system works in Canada is critical to the successful integration of newly arrived Ukrainians into Canadian society.

What is a credit history and credit score?

A credit history is a detailed record of all your financial transactions related to credit that is kept throughout your life. This record includes information about how you use credit cards, pay loans, bills, and other financial obligations.

Your credit history is used to calculate your credit score, which is a three-digit number between 300 and 900 that shows how reliably you manage your credit.

A credit score is a numerical representation of all the information in your credit history. It shows lenders how likely you are to repay borrowed money on time. The higher your score, the more trust lenders have in you and the better loan terms you can get.

Rating system in Canada

According to Equifax, the Canadian credit rating system has the following categories:

• 300-659: Poor credit rating
• 660-724: Good credit rating
• 725-759: Very good credit rating
• 760-900: Excellent credit rating

The average credit rating in Canada is around 650 points.

Credit bureaus in Canada

There are two main credit bureaus in Canada:

Equifax Canada Uses the Equifax Risk Score 3.0 model, analyzes history over 81 months, updates data at least once a month. Free report and rating available online.

TransUnion Canada Uses the CreditVision model, considers 84 months of history, and updates monthly or every 45 days. In Quebec, the rating is free online, in other provinces, a subscription is required.

Factors that affect your credit score

1. Payment history (≈35%)
2. Debt-to-credit ratio (≈30%)
3. Length of credit history (≈15%)
4. Types of credit (≈10%)
5. New credit inquiries (≈10%)

Types of credit checks

• Soft checks — do not affect your score (checking your own report, employers, landlords, offers from lenders).
• Hard checks — temporarily lower the rating (loan, mortgage, car lease applications).

Features for newly arrived Ukrainians

• No credit history upon arrival — data from Ukraine is not transferred automatically.
• International history transfer programs:
• Equifax Global Consumer Credit File — launched in 2024, currently covers India, with plans to expand.
• Nova Credit — operating since 2023, available for Ukraine through the International Bureau of Credit Histories (IBCH).

How to start building credit history in Canada

Obtaining a Social Insurance Number (SIN)

The first step is to obtain a SIN number, which is required for most financial transactions in Canada.

Opening a bank account

Opening a bank account is the foundation for building a credit history. Many banks work with credit bureaus when opening accounts. Special packages are available for Ukrainians from various banks:

• Scotiabank StartRight Program The program offers free account services for one year and special credit cards for newcomers. No credit history in Canada is required to obtain a credit card under this program.

• Ukrainian Credit Union

UCU offers a special “Welcome Ukraine” package for new Ukrainian immigrants with free service for three years. The package includes no-fee accounts, debit and credit cards, and Ukrainian-language support.

Tools for building credit

Secured Credit Cards

Secured credit cards are one of the most effective ways to build credit history. They require a cash deposit, which serves as collateral and determines your credit limit.

Advantages:

• Easy to obtain even without a credit history
• Help build credit scores
• Work like regular credit cards
• Deposit is refunded when the account is closed

Popular options:

• Neo Secured Mastercard: $5/month, minimum deposit $50, no hard credit check
• Capital One Guaranteed Secured Mastercard: easiest to obtain according to reviews
• Home Trust Secured Visa Card: minimum deposit $500, no annual fee

KOHO Credit Building

KOHO offers a Credit Building tool for $10/month that allows you to build credit without debt. The service reports to credit bureaus monthly.

Mobile phone plans

Some mobile carriers report payment history to credit bureaus.

Contact your landlord

You can ask your landlord to report your rent payments on time.

Using credit cards to build credit

Basic rules:

• Pay the full amount every month
• Don't miss payments
• Use less than 35% of your limit
• Use your card regularly for small purchases

Special programs:

• TD Newcomer Credit Cards
• CIBC Welcome to Canada Credit Cards
• BMO Boost Secured Credit Card

Monitoring and checking your credit history

Regular checks: It is recommended to check your history once a year.

• Equifax: myEquifax
• TransUnion: Consumer Disclosure

Correcting errors:

1. Gather evidence
2. File a dispute with the credit bureau
3. Contact the creditor
4. Add an explanatory statement

Factors that do NOT affect your score

• Age, gender, race, marital status
• Religion
• Income (not considered in the calculation)
• Presence of savings accounts
• Occupation or place of employment

Common mistakes made by newcomers

• Avoiding credit
• Submitting multiple applications at once
• Ignoring monitoring

Time required to build credit

• Newcomers: first results in 6 months, stable rating in 12–18 months
• Bad history: recovery in 12–18 months

Importance of credit history in Canada

• Renting a home
• Employment
• Insurance
• Mobile communications and internet

Support resources for Ukrainians

• Financial literacy: seminars, webinars from banks and UCU
• Special programs: Windmill Microlending, Coast Capital

Credit history in Canada is a fundamental element of the financial system. Understanding how it works and monitoring it regularly is key to the successful integration of Ukrainians into Canadian society.