How Does Credit Work When Moving to Canada From the U.S.?

Credit management is as important in Canada as it is in the United States. Most large U.S. banks also have branch offices in Canada. All three major credit bureaus--TransUnion, Equifax and Experian--operate in Canada. If a consumer moves from the U.S. to Canada, his credit history will absolutely follow him. Most new citizens in Canada will need to reapply for loans and mortgages, but these loans will be based on their United States credit histories.

History

The United States and Canada have a very close relationship. They share banks and credit bureaus. Canadian citizens' credit scores are held under Social Insurance Numbers. However, banks who have operations in both countries have access to all of their customers' credit histories--whether they are Canadian or American.

Old Credit

Moving to a Canada will not relieve an American citizen of his debts in the U.S. An American credit report will remain active throughout the life of any native-born American or naturalized citizen. This history is accessible to any authorized lender in both Canada and the U.S.

Considerations

Canadian banks may not extend credit to a newly arrived American citizen. First, he will not have a Canadian Social Insurance Number. Second, without a printout of a current credit report and a letter from an American bank, he will likely be denied any loans.

Benefits

The main benefit of the close financial relationship between the U.S. and Canada is the ease with which Americans can make a move to Canada. Customers should print out a copy of a current credit report and get a letter of standing from their banks. In addition, customers can request that a Canadian loan officer pull an American credit report from one of the three credit bureaus.

Warning

Customers cannot leave a poor history in the United States. If a customer applies for a loan, mortgage or car loan in Canada, the loan officer will need to verify his credit history. Without a valid Canadian credit report, the loan officer will get authorization to run his American credit bureau--thus revealing the poor credit history.