How Limited Credit Access Keeps Immigrants From Getting Ahead

When newcomers arrive in Canada, they often bring strong financial habits, professional experience, and the ambition to build a better life. Yet one major obstacle frequently stands in the way: access to credit.

A 2025 TD survey found that 92% of newcomers recognized the importance of establishing credit before arriving, but 82% of applicants immediately encountered barriers. These obstacles are more than inconvenient—they shape whether immigrants can secure housing, buy a car, start a business, or plan for the future.

This is not just a financial problem; it’s an inclusion issue. If immigration is central to Canada’s future, then addressing systemic barriers in the financial system must be part of the national conversation.

A cultural shift and a credit wake-up call

I came to Canada with solid finances but discovered the system didn’t recognize my history. Growing up in India and the Middle East taught me to avoid debt: credit cards were uncommon, loans were discouraged, and financial independence meant living within your means. That perspective changed when I met my wife, who grew up in Ottawa.

I remember a conversation early on: she was puzzled why I booked travel through an agent instead of online. I didn’t have a credit card and didn’t think I needed one. In Canada, credit cards are a default tool for purchases, travel bookings, and reward points; elsewhere, they can be seen as a vehicle for spending beyond means. Our different experiences weren’t an argument—just different cultural approaches to money.

When I first got a credit card, I misused it like many people who haven’t relied on credit. I learned the hard way and eventually developed healthy habits: using credit for convenience, paying balances in full, and earning rewards on purchases I would have made anyway. But when we moved to Canada, all that learning didn’t transfer automatically.

Credit history doesn’t travel

One truth newcomers learn is that financial history rarely follows you. I arrived financially stable but without a Canadian credit file. My first Canadian credit card had a $200 limit—barely useful. It wasn’t that I had a bad credit score; I simply had no Canadian score. Building a reliable credit profile took years.

That lack of history affected major life milestones. We were unable to qualify for a mortgage initially—not because of income or savings, but because the credit history criterion wasn’t met. Years later, after consistent on-time payments and responsible use that led to scores in the 800s, I still didn’t receive the same offers and automatic increase opportunities my wife did. The system rewards length of history, not necessarily responsible behavior.

Harder than it should be

The TD survey mirrors these experiences. Among newcomers:

• 31% qualified only for credit limits too low to meet basic needs
• 27% struggled to secure housing
• 24% couldn’t save or invest toward future goals
• 66% worried about their Canadian credit history
• 79% found it difficult to start building credit at all

That last figure is especially telling: building credit is not simply challenging—it’s structurally difficult for many immigrants. While financial institutions are beginning to recognize newcomers’ needs, awareness alone is not enough. Newcomers need actionable solutions, not just empathy.

Practical tips to build credit as a newcomer to Canada

From my experience and from helping others, these practical steps can speed the process and reduce frustration:

1. Start small, be consistent, and be patient. Canada’s credit system rewards time and steady behavior. Begin with a secured card or a low-limit unsecured card and pay it off each month. Over months and years, your profile will grow.
2. Consider a co-signer. If you have trusted family or friends in Canada, a co-signed lease or loan can open doors to housing and higher credit options. Both parties should understand the risks and responsibilities.
3. Explore alternatives to the Big Five banks. Fintechs and digital banks often offer newcomer-focused tools that report rent, provide credit-builder products, and have lower fees. Options like rent-reporting services and credit-builder accounts can help establish a history of reliable payments.
4. Use credit wisely—treat it like a muscle. Keep utilization low (under 30%), make payments on time or early, avoid multiple hard inquiries in a short period, and request limit increases only after demonstrating responsible use.
5. Learn how the system works. Understand how scores are calculated—payment history, utilization, credit mix, age of accounts, and inquiries—and which products affect your profile. Lenders often value time and diverse credit types as much as income.
6. Seek financial advice selectively. Many banks offer newcomer advisors. Ask targeted questions, compare guidance, and choose advisors who understand your specific circumstances and goals.
7. Do the homework, but don’t blame yourself. The system can be slow and unfair, but learning it helps. Compare products, visit branches, inquire about newcomer programs, read terms, and track your credit score regularly using free services.

You’re not alone

Newcomers are not lacking discipline or awareness—often they simply lack access. Advice helps, but institutions must change too. Canada’s financial system should design products that meet newcomers where they are and help them build a stable future.

If you’re new to Canada and starting from scratch, there’s no shame in that. Many have navigated these same hurdles and succeeded. The process should be easier, and banks, fintechs, and policymakers all have a role in making credit accessible and fair for newcomers.

More money advice for newcomers to Canada:

• Credit scores and credit reports: What newcomers to Canada need to know
• 8 financial mistakes newcomers to Canada make—and how to avoid them
• How much income do you need to buy a home in Canada?
• Finance terms in Canada vs. India: equivalents explained
• Buying a car in Canada: 7 tips for newcomers