TD survey reveals most newcomers know credit's importance but struggle to build a Canadian credit history
Nearly four in five newcomers to Canada say it is difficult to start building a credit history, according to a TD survey, and 59 percent believe better credit access would improve their living experience.
The findings point to barriers that could affect newcomers’ ability to secure housing, borrow at competitive rates, and meet long-term financial goals.
The survey found that 80 percent of newcomers had applied for credit since arriving in Canada, with 82 percent encountering challenges during the process.
Reported issues included limited knowledge of credit card rewards programs (35 percent), lack of familiarity with the Canadian financial system (31 percent), and qualifying only for lower credit limits or loan amounts insufficient for their needs (31 percent).
Two-thirds of applicants expressed concern about their Canadian credit history.
Insufficient access to credit has tangible impacts. Among those surveyed who had applied for credit, 22 percent said their access was inadequate to maintain a comfortable lifestyle.
Respondents cited increased financial stress or anxiety (29 percent), reduced borrowing ability (28 percent), higher interest rates (27 percent), difficulty securing housing (27 percent), and inability to save or invest for future goals (24 percent).
The survey also found that credit awareness is not the core issue.
It reported that 68 percent of newcomers were familiar with credit scores before arriving in Canada, and 92 percent believed it would be important to build a credit history.
Credit cards were the most common product applied for (92 percent), followed by car loans (18 percent) and mortgages (13 percent).
Muhammad Kara, associate vice president, New to Canada, Everyday Advice Journey at TD, said that getting off to a strong financial start is challenging without access to the necessary credit, and stressed the importance of building a credit history as newcomers establish themselves.
Kara added that many newcomers face stress, restricted loan access, and obstacles to achieving financial goals, underscoring the need for tailored solutions.
When asked what would help build or improve credit history, 34 percent of newcomers identified better access to financial advisors who understand their unique needs.
