credit scores in Canada

[chandu01]

hi does anybody know
1.how credit scores work in Canada,
2.are they done the same way like in USA
3.do USA credit scores have any impact in Canada (having excellent to very good scores in USA help to buy a car or house)

 

[chappan]

The credit scoring system in Canada works the same way as in the US. However, your US credit score (positive or negative) will not have any impact on your credibility in Canada. In other words, if you had an excellent score in the US and you have just moved to Canada, you'll have to start all over again unless you are doing a global transfer of your credit card. Example, if you have American Express card through Costco, you can apply for Global Transfer in Canada. AMEX will issue you a Canadian credit card based on your US credit score. However, if you were to apply a fresh AMEX card in Canada, they will only consider your Canada score which will be null if you are new so your application will possibly get rejected.

I just went through all this so have first hand experience dealing with it. If you are new and would like to have a credit card, your best bet is Secured Credit card in which case your bank, let's say CIBC, will set aside an amount (depending on whatever limit you want on your credit card) for 2 years and if you continued to pay on time for next 2 years, you can request them to release your funds back into your checking or savings account.

Hope it clarifies.

 

[chappan]

Sorry, got stuck in explaining about credit cards and didn't respond to your third question properly. Your Good US credit score will NOT help you with getting a good rate on Car, House or anything. As mentioned before, you'll have to re-build your credibility from scratch. Canada also uses Equifax or similar credit scoring agencies but both systems are country specific, even if it is the same credit rating agency. Your reflection of good score in US based Equifax report will have zero impact on your Canadian Equifax report. I hope it makes sense.

 

[chandu01]

thank you very much, its really useful info.......

 

[banrad]

Just FYI, instead of waiting two years long to request the deposit on your secured card be lifted, you can request a new unsecured credit card after you've landed a job, even if it's not permanent. If your account is in good standing, your request will most likely be accepted.

I was in the same situation and wanted to transfer my secured card to an unsecured one after a year in Canada. The bank teller advised it wasn't quite feasible before 2 years elapsed, but she advised I applied for a new card and then cancelled the secured one At the time, I only had a fixed-term contract job, but it worked. Visa even offered a higher limit on my new unsecured card.