Does a long absence from Canada affect your credit rating?

A credit rating is a numerical indicator of your financial discipline, which is determined by your ability to repay your debts to banks and other lenders on time and in full. In Canada, the main agencies that compile your credit report and calculate your credit score are Equifax and TransUnion. Many factors influence this score: payment history, amount of debt, length of credit lines, new credit applications, and more. All of this is carefully tracked by the system so that banks and other financial institutions can assess the risks of issuing you a loan. It would seem that a long trip outside of Canada — after all, while you are away, you are not using local credit cards or taking out new loans — would not affect your credit rating. In reality, however, it is not that simple: in this article, we will take a detailed look at the factors that may change while you are abroad and how to take them into account so that you can return with a high credit rating and maintain your financial reputation.

1. Payment history

Automatic debits during your absence

Even if you do not plan to make any new purchases in Canada, automatic payments will often continue to be debited from your account: insurance, subscriptions to services (streaming platforms, cloud storage), monthly fitness club membership fees, credit cards, and mortgages. If you have not set up automatic transfers from your Canadian bank account or enabled automatic payment deferrals, these mandatory payments may be missed, resulting in late payments. Even a single missed payment of 1–2 days is recorded on your credit report as a late payment, which automatically lowers your credit score.

Tips

  • Plan ahead. Before you leave, make a list of all your regular mandatory payments. Make sure you have enough money in each account or that automatic payments are set up.
  • Backup automation. Use two sources for debits: your primary account and a backup credit limit. If there are insufficient funds in one account, the system will debit the other.

2. Credit limits and card usage

Decreased activity and account closure

Lenders track not only your payments, but also how actively you use the credit products issued to you. If you do not activate your credit cards during a long period of absence, your issuer may initiate their blocking or even account closure due to inactivity. Closing a credit line negatively affects your average age of open accounts and your total available credit limit, which can lead to an increase in your utilization ratio. This ratio — the ratio of your debt to your maximum available limit — is one of the key factors in calculating your credit score.

Tips

  • Keep your transactions small. Even when you are away, you can plan a one-time online purchase for 1–2% of your credit limit and then pay it off immediately. This will show activity and prevent your account from being closed.
  • Keep your accounts open. If you are not using your card, write to your lender asking them not to close your account due to inactivity while you are away.

3. New loan applications and credit report checks

Multiple inquiries (hard inquiries)

If you apply for a credit product in another country while abroad, agencies may still record this check on your Canadian credit report as a “hard inquiry.” Several such checks in a short period of time can lower your rating, as the system interprets this as a search for new sources of debt.

Tips

  • Avoid unnecessary checks. Refrain from contacting new lenders or banks unless absolutely necessary while traveling.
  • Use pre-decisions. Many institutions offer pre-approval checks that do not affect your credit score (soft inquiries). Take advantage of this before making a final decision.

4. Balancing credit risk

Interconnection with other countries

If you take out a loan in your country of residence, such as a local bank card or an online loan, these transactions will not appear directly on your Canadian report, but if you default, the local lender may refer the matter to international collection agencies. They may add information about your debt to international databases, which will indirectly affect your Canadian credit rating through information sharing between bureaus.

Tips

  • Follow the terms of local loans. Always pay your obligations to local financial institutions on time to avoid having your debt transferred to collectors.
  • Check for international implications. Check with your lender to see if they work with international bureaus and what risks this may pose.

5. Length of absence and resident status

Tax and resident status

A long absence from Canada may change your tax and residency status, which will affect your eligibility for financial benefits and credit products. If you are no longer considered a resident for tax purposes, lenders may treat you as a foreigner, making it more difficult to maintain lines of credit and reducing your available limits.

Tips

  • Notify your banks of your status. If you expect to become a non-resident, notify your banks and credit unions. This will help prevent your accounts from being frozen due to suspicion.
  • Plan your return. Develop a strategy for confirming your residency upon your return (e.g., document your residential address, tax payments).

6. Regularly monitor your credit report

Use monitoring services

Even while abroad, it is a good idea to check your Canadian credit report regularly to catch any changes, such as new inquiries, unexpected late payments, account closures, or unrecognized transactions.

Tips

  • Sign up for alerts. Choose a paid credit monitoring service (such as Equifax or TransUnion) with push notifications for any changes.
  • Check once a month. Even without paid services, you can order a free report once a year — plan this for the end of your trip to understand the impact of your absence.

A long absence from Canada can have an indirect but significant impact on your credit score. Automatic payments, card activity, creditor inquiries, and residency status are all interconnected and can lower your score if you don't pay enough attention to these issues. However, a well-thought-out strategy — from setting up automatic payments and maintaining account activity to regularly monitoring your credit report and informing banks of any changes — will allow you to maintain a high credit rating and financial reputation. When you return to Canada, you will not only enjoy the joy of coming home, but also the confidence that your loans and finances remain under reliable control.