Imagine having decades of positive credit history in your home country — yet when you arrive as a newcomer to Canada, no lender approves you for a mortgage, business loan, or credit card. You might have a great education, job, and strong standing with your home country’s creditors — but none of that matters to Canadian lenders.
Why? Because Canadian credit bureaus don’t recognize it, meaning you’re starting with zero credit history.
It might not make sense, yet this is nothing new. Disconnects between international credit bureaus have persisted since the beginning of credit reporting.
Credit Canada CEO Bruce Sellery sat down with Misha Esipov, founder of Nova Credit, in a recent Moolala: Money Made Simple podcast episode. They discussed newcomer credit challenges, how Nova Credit seeks to address them, and resources that Credit Canada offers that help to overcome credit issues as a newcomer.
Credit Challenges for Newcomers and the Industry Issue
Problem number one? Newcomers don’t have credit history that’s recognized in the country they’ve immigrated to. Meaning? You have to start over. Even Bruce shares his experience with this issue during his time abroad in the US:
“I moved to the US a few years ago, and it was like I dropped from Mars. Nothing mattered that I had done here in Canada, and that’s still an issue for people arriving in this country.”
Why is this the case? Esipov says it’s an industry issue in the credit reporting space:
“The big credit bureaus exist around the world, but they’re really regional businesses — no single credit bureau exists in every market that matters.”
Limited access to credit means newcomers need to wait much longer than Canadian natives to qualify for a mortgage, since they have to build up a good credit profile with smaller loans and lines of credit. Or, they’re faced with higher interest rates that creditors charge to make up for the perceived risk.
It also means they’re looking for smaller, more affordable homes, according to one article by the Globe and Mail. Almost half of Canadian immigrant homebuyers were able to invest in real estate within five years of arriving in Canada; however, it’s important to note that the ease with which newcomers find their footing does, in some part, depend on where they’re coming from. It’s easier for an American immigrant to get credit faster than someone from India, for example.
Another disconnect? Esipov says credit bureaus have different nuances from country to country that can exacerbate the difficulty of accessing credit:
“Some markets just don’t have credit bureaus — the next big one is the concept of positive versus negative reporting…in Canada the good and bad is reported…if you do repay on time, that information is reported…but in some markets like Brazil historically have only negative reporting, where only that information is reported to the bureau.”
Nova Credit aims to bridge the reporting gaps between international credit bureaus and deliver more credit access to newcomers. Here’s how.
Nova Credit: Cross-border Credit Bureau Making Credit More Equitable for Newcomers
Nova Credit aims to bridge the reporting gaps between international credit bureaus and deliver more credit access to newcomers:
“We’ve partnered with the big bureaus and independent bureaus and brought together a global industry that has never really worked well together,” says Esipov.
The method? Revealing and authenticating “lost” credit histories and data around the world to help Canadian financial institutions make better credit assessments for newcomers, and thus expand credit access.
“Think of us like the Rosetta Stone,” says Esipov.”You’ve got credit history, let’s say you’re moving to Canada from India, and connect to us, wanting to know if you are eligible to apply for credit here. We pull your data from India…we translate that to Canadian scores and analytics and we deliver it on your behalf, only with your consent and approval, to a bank.”
Nova Credit also takes customers through a secure authentication process that reduces the risk of fraud. Their system is now used by some of the world’s biggest banks and partners like Verizon, HSBC, and more.
Their most popular product is the credit passport — a global data dictionary allowing for someone’s financial identity to compliantly move around the world. Your prized credit history can now be moved as you immigrate to new countries.
Armed with this valuable credit data, newcomers can increase their chances of approval for a car loan, personal loan, mortgage, or any type of credit.
Credit Canada’s Resources to Newcomers
New to Canada and don’t know where to start with your finances? Credit Canada can help — Canada is made up of a diverse immigrant population, many of whom we serve with our 100% free, non-judgmental credit counselling and debt relief services.
Here are some resources to take advantage of:
- Credit counselling: We’ll discuss your unique financial scenario and walk you through money management tips, budgeting advice, and debt relief options to help you find financial stability.
- Credit building: We’ll help you access your credit report, understand your score, and access secured credit products to help you build your credit.
- *NEW Canadian Credit for Newcomers e-learning program: Building Credit From the Ground Up: A Program for Newcomers to Canada is a free, multilingual online learning program about credit developed specifically for newcomers to Canada. This course is available in 8 different languages.
Build Credit and Overcome Debt with Credit Canada
Newcomers face many complex barriers when settling in Canada. One of the most stressful obstacles can be access to credit, which can affect business opportunities, housing, and general financial autonomy.
Thankfully, the industry is shifting and credit bureaus are being forced to adjust to the needs of borrowers.
Organizations like Nova Credit and Credit Canada are available to help newcomers to Canada adjust to their new lives with the knowledge and access to credit they need. It’s time to overcome credit barriers and get back to living your new life in Canada. Explore our free Newcomer Credit e-learning course today!