The Ultimate Guide to Credit Scores in Canada

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Last updated on September 11, 2019 Views: 547 Comments: 26

What is a credit score? A credit score is a 3-digit number that allows lenders to determine a potential borrower’s credit risk—the risk they run of not paying back their credit cards or loans. Canadians typically cannot borrow money or receive credit of any kind unless they have a solid credit score. Canada’s two national credit bureaus, Equifax and TransUnion, create credit scores and credit reports based on the information they receive about each borrower from their lenders.

In this article

What Is the Credit Score Range Canada Uses?

Canada operates with a credit score range between 300 and 900. The lower your score, the less likely you are to be approved for a credit card or loan. If you do manage to qualify for a credit card or loan despite a low score, the interest rate you receive will likely be high.

Conversely, the higher your credit score, the more likely you are to be approved for a credit card or loan, and the lower the interest rate will likely be. Good credit can also help you rent an apartment, get a better job, get approved for insurance coverage at a lower premium and get a better plan for your cable, phone or utilities.

Excellent (741-900)

Consumers with excellent credit will likely have no or very few late payments in their credit report, will regularly pay off their balances in full, and will have a low credit utilization across all their lines of credit. Those with excellent credit enjoy rapid approval for their credit card and loan applications, as well as the lowest interest rates available, high credit and loan limits, and access to premium credit card benefits. In other words, all the financial doors are open to Canadians with excellent credit scores and banks roll out the red carpet to get their business. The median credit score in Canada is 749, which means 50% of the population has excellent credit.

*note that credit score ranges in this article are modeled on the Equifax Risk 2.0 scoring model. Designations are subjective and can vary by credit bureau and credit issuer.

Good (690-740)

Consumers with a credit score in this range still enjoy some of the best financial products and interest rates available. This credit score means you are generally financially responsible: Canadians who sit in this credit score range make most of their payments on time with only the occasional late payment on rare occasions. Their credit card utilization is pretty low given the amount of credit they have available. Those with scores in this range are unlikely to have difficulty obtaining most credit products and loans.

Fair/Average (660-689)

You still have a lot of credit options at the ‘average’ credit score Canada evaluation, but borrowers on the lower end of this range will certainly experience higher interest rates from lenders. Those on the mid to lower end probably have been late on their payments multiple times to more than one lender and may have defaulted on a loan at some point.

Below Average (575-659)

Borrowers with below average credit will face higher interest rates for the lines of credit they are approved for, which can cost quite a bit of money over time. They also are not eligible for the more lucrative credit cards that provide accelerated levels of cash back and rewards.

Poor (300-574)

If you’re in this credit score range, you unfortunately have a significantly damaged credit history. Perhaps you have defaulted on multiple loans, your debt is very close to your credit limit, or you have declared bankruptcy, which stays on your credit report for at least seven years. In this range you will have a difficult time obtaining credit or getting approved for a loan.

What Is a Credit Report?

Credit report

While a credit score is a simple shorthand for your creditworthiness, a credit report is a more complete overview of your financial history, and it’s one of the major tools a lender uses in determining whether or not to give you credit. Contained within your credit report is key identifying information like your address and social insurance number, your payment history with your creditors, a record of bankruptcies or any court judgments that would affect credit worthiness, a list of lenders or other parties that were authorized to look into your credit, and any banking or collections information.

Canadians are entitled to one free credit report per year (called a Consumer Disclosure) from either Equifax or TransUnion. Click here to apply for your free credit report from Equifax by mail, and click here to receive your free credit report from TransUnion either by mail or online. If you can’t wait a year for your free report from the credit bureau, Borrowell, a Canadian financial technology company and credit monitoring service, can give you free access to your credit score any time. I reached out to Borrowell’s CEO, Andrew Graham, to get his thoughts on the value of this new offering.

“Borrowell has recently launched free credit report monitoring. For the first time, Canadians are able to monitor important information in their Equifax credit report on a monthly basis for free online,” said Graham.

“Now more than ever, Canadians should keep a close eye on their credit and personal finances. We were proud to be the first company in Canada to offer consumers free access to their credit scores. This is a logical next step for us and gives our users a much deeper look into their overall credit profile, the same data used by many lenders, banks, cell phone providers and landlords.”

If you receive your credit report and discover any inaccuracies, inconsistencies, incomplete information or signs of fraud, you can dispute the information with the credit bureau.

What Is a Credit Rating?

A credit rating is a rating listed by some  credit reporting agencies. It is an individual rating of each of your credit history’s items detailing the type of credit being used and how quickly payments are made. The ratings for each item on your credit history are expressed on a scale of 1-9: “1” means you paid your bill within 30 days of its due date and “9” means you never paid your bill or that you’ve made a debt repayment proposal with the lender.

Along with the number, you will see a letter assigned to each credit rating. The letter stands for the type of credit being used. There’s “I” for instalment (e.g. a car loan), “O” for Open (e.g. a student loan) and R for revolving (e.g. a credit card).

What Factors Influence a Credit Score the Most?

Credit Score Factors

There are many factors that influence a credit score positively or negatively. Equifax and TransUnion both have slightly different formulas for determining scores, but there are a few shared considerations evaluated above all else:

Payment History – 35%

Payment history is the most important factor influencing your credit score. Lenders want to see how likely you are to pay back the credit they are about to give you, and they figure it out by looking at how/whether or not you paid back your other loans and consumer credit.

Your payment history shows all of your consumer debt except for mortgages. It details whether you’ve paid each debt as agreed, whether payments have been deferred, whether the debt has been paid off entirely, whether payments have been late or whether you have any payments in collections. Bankruptcy filing and liens against you also fall into this category.

While the exact number of points that your credit score drops for each of the above infractions is shrouded in secrecy, a general rule is that the higher your credit score is to begin with, the more points you will lose for poor payment incidents. However, if your credit score is already low, you won’t lose as many points from new negative behaviors. For example, if your credit score is 780 and you have your first 30-day late payment, your score can drop 90-110 points (more if it’s over 30 days late).  However, if your credit score is 680 and this is your third late payment, your score will only drop 60-80 points. Similarly, a foreclosure means a credit score falls 140-160 points if your original credit score was 780, but falls only 85-105 if your original credit score was 680.

More recent payment history has a greater impact on your score, and more distant payment history has a lesser impact.

Credit Utilization – 30%

Credit utilization refers to the amount of credit that you are using relative to the amount that is allotted to you. For instance, if you have a credit card with a $1000 credit limit, and you have a balance of $200 on that card, it’s a 20% credit utilization.

A widely-regarded rule of thumb is to keep your total credit utilization across all credit products lower than 30%.

Length of Credit History – 15%

Creditors like to see that you’ve had credit history for a long time, and that you’ve used credit consistently. Those who have short credit history, or who haven’t regularly used the credit they were allotted, are seen as being at greater risk of defaulting on their balances.

Soft and Hard Credit Checks – 10%

A ‘soft check’ occurs when you check your credit score, or when anyone else reviews your credit history for non-lending purposes. It does not negatively affect your credit score.

A ‘hard check’, on the other hand, occurs every time you apply for a credit card or loan. Having too many hard checks in your credit history during a short period of time can negatively affect your credit score (knocking it 7-10 points). A large number of applications for credit products can signal financial difficulty to your creditors and make them suspect you of “credit shopping.”

Diversity of Credit – 10%

Diversity of credit shows lenders how many types of credit products you have in your credit history. The more diverse your credit history – showing a variety of credit types – the better. Credit diversity with payments made on time shows lenders you’re responsible with all types of credit, which makes them more apt to lend to you.

Total Payment Ratio

Though not officially part of credit score calculations yet, credit bureaus are now beginning to look at a new factor called a Total Payment Ratio (TPR). TPR has been a consideration on TransUnion’s credit reports since 2015. Do you generally pay the minimum? Do you generally pay significantly above the minimum? Or do you typically pay off your balance in full? These are the questions that your TPR answers: how much do you pay and how consistently do you pay it?

While TPR shows up on TransUnion’s credit reports, the Globe and Mail has reported that neither credit bureau is as of yet factoring in TPR when calculating credit actual credit scores. This may change in the future.

How to Increase Your Credit Score in Canada

Negative information can stay on your credit report for at least seven years. If you have negative factors in your history you need to counter them with positive steps toward repairing your score. And there’s no time like the present, right? We advise you to start by focusing on these key steps:

Pay Your Bills Consistently and On Time

Pay your bills each month by the due date. Late payments can really bring down your credit score, so set up automatic payments to never miss your deadline. If you pay with online banking, make sure you pay a few days in advance of the deadline to ensure the payment is processed in time.

Reduce Your Credit Utilization

Try to pay off your credit card balances and other debts so you are only using a portion of the credit you have available: 75% is a start, 50% is better and 30% and below is best. It should take about a month for your credit score to rebound (reportedly between 40-80 points) after reducing your utilization to below 30% and keeping it that way, provided there aren’t any more strikes against you (like late payments).

Resist Credit Inquiries Unless Absolutely Necessary

Make sure credit inquiries aren’t being made on your credit report on a regular basis. Soft credit checks—those in which you or a prospective landlord or employer look at your score—don’t affect your credit score. But hard credit checks, like when you want to increase a credit limit or apply for a credit product or loan, always do.

Some Canadians rack up cash back and rewards points by engaging in “credit churn,” a practice where applicants apply for credit cards to take advantage of sign-up bonuses offered in the first few months and then cancel these cards when the bonus period expires. But this practice is unkind to your credit score, as each time you apply for a new card it can take up to ten points off.

Correct Misinformation and Update Old Information

Take advantage of the annual free credit report application and get your copy. Not only will it tell you whether your credit score is low or high, but it will let you know if there are any open credit lines that shouldn’t be there (perhaps indicating fraud) and if there is any negative information there that’s older than seven years that simply hasn’t been removed. According to Borrowell, there’s also a statistical correlation between regularly monitoring your credit report and improving your score.

“A recent study we conducted found a positive relationship between the frequency of credit score monitoring and credit score increase over time. Drawing from user data, we found that customers with lower initial scores at sign-up tended to improve their scores the most – by as much as 30 points among engaged users. In short, Borrowell users that monitor their scores more frequently see the largest increase in their scores,” says Borrowell CEO Andrew Graham.

Once you review your credit report, work to get misinformation removed if anything is in collections: work to pay off the amount owed and ensure that the collections agency will remove that from your credit report as soon as they receive the owed amount. Get the agency’s guarantee in writing, and then check your credit report at a later date to make sure it reflects the hard work you’ve put in to clean it up. Only what is true should remain.

Do Not Close Paid-Off Credit Cards Right Away

Man cutting up credit card

When you do pay off your debt, resist the urge to close your credit accounts right away, because keeping paid-off credit products open can keep your credit utilization low.

Think of it this way: Let’s say you have two credit cards, each with a $1,000 credit limit. One has a balance of $500, and the other a balance of $0. This means you are using $500 out of $2000 in credit, which works out to a strong 25% utilization. But the moment you close your $1,000 credit card with the $0 balance, suddenly you’re down to a $500 balance on the remaining $1,000 card, which doubles your utilization to 50%. Before closing the paid-off credit card you were well below the recommended credit utilization ratio of 30%, but after closing it you jumped above it.

Don’t Be Afraid of a Fresh Start

Consult a credit counsellor before engaging in bankruptcy proceedings—such a move can damage your credit for seven years and very few creditors will lend to you during that time. However, if you do take this drastic step, know that you can rebuild your credit with a secured card. This is a credit card requiring an upfront deposit that makes up your credit balance, but still gets reported to credit bureaus to help you re-establish your credit and eventually go back to an unsecured card.

Have a credit-related question that we didn’t answer in this guide? Shoot us an email and we’ll do our best to answer any inquiry you might have about credit scores, reports, ratings, and more.

Article comments

26 comments
SBR says:

Can a 8-year-old international debt can affect my credit score in Canada if followed by a debt collection company’s office in Canada on behalf of their client based in the UAE

The GreedyRates Team says:

Hey SBR,

Very interesting inquiry! Essentially the answer relies on several factors, including how much you owe and whether or not the lender that you owe is able to easily and inexpensively pursue you. While companies in the UAE aren’t likely involved with TransUnion or Equifax, that doesn’t mean they can’t get in touch with a Canadian lawyer and try to obtain a foreign legal judgement to collect the debt through a Canadian agency.

This is an expensive process so it’s less feasible unless what you owe is significant, or if the company has a branch in Canada (and therefore easier access to a lawyer that works for their subsidiary). Essentially, if the company is unable to get Canadian collections to pursue you then there is no impact on your Canadian credit score, while the opposite is true if they retained counsel and set him or her after you.

GreedyRates

Tawsif Islam says:

I’m confused about the “types of credit” terminology. I follow credit building influencers based in the states and that category seems to simply apply to “amount of credit cards.” is it the same here? Or does this involve having credit cards/lines of credit/loans/etc.

Also, does combing hard inquiries work here? I’m relatively young so I’m trying to build a base of NoAF cards to age with me. I’m upgrading my TD Rewards card to a Platinum Travel one, and was wondering if I could double dip and get the NoAF TD cash back card, while avoiding a second hard pull.

The GreedyRates Team says:

Hey Tawsif,

Great comments, and commendations as well for your thorough self-education on building credit! If you’re wondering about diversity of credit, then it doesn’t matter if you’re in the US or Canada because both countries have the same credit bureaus. Having a diverse array of credit products is seen as more favorable to a bank than a potential borrower who has only ever utilized one form of credit. That means exactly what you stated: a healthy mix of credit cards, loans, mortgages, secured debt, lines of credit, car loans etc.

As for combining hard inquiries, we’ve heard reports that Amex Canada will combine all hard inquiries made for applications in the same day into one, but it’s inconclusive whether Visa and Mastercard Canada do the same. Usually people won’t (and shouldn’t) apply for multiple cards in the same short window—and doing so in the same day is no exception obviously. We’re almost positive that TD will make an additional hard check on your credit if you apply for the cash back card but confirm with them first. Either way, the long-term benefits of a great credit relationship will outweigh a hard check any day—so good luck!

GreedyRates

jb says:

Thx for the tips!
What is the most favourable reporting language after outstanding debt has been paid off i.e “Paid in Full”, “Paid as Agreed”, “Settled” etc. I have debt that was really bad – it went past collections and I went through court and agreed to a settlement. We agreed on very low monthly payments but I’m now in a position to pay it off very quickly and want to ask that it is reported as something that will be favourable on my credit report as an act of good will (all they can do is say no). Would “Paid in Full” be best? Can it be removed altogether – and would that even be to my benefit?

thx!

The GreedyRates Team says:

Hi JB,

Good question, thank for posting it with us. If you’re trying to navigate the language on your credit report, then it helps to think of any entry from the perspective of a lender. If they see an entry that indicates you’ve negotiated with another lender to pay less than the amount of what you originally owed, it doesn’t look good (and therefore has a negative impact). The opposite side of the coin is also true: A debt that’s paid in full is desirable for creditors and will encourage them to extend you opportunities to borrow (it’s therefore positive for your credit score).

Paid as Agreed and Paid in Full are the same and represent the healthy latter situation, while Settled is obviously the former example (which has reduced you credit score). If you’ve negotiated a settlement in court already and have agreed to pay off less than what you owed, and in monthly deposits as described, then your debt is likely Settled already. The lender now believes you’ll pay back the new sum you’ve agreed to pay, so simply agreeing to pay that amount but upfront may not build enough goodwill to give you any leverage, nor warrant an upgrade to Paid in Full. However, it’s absolutely worth a shot to ask!

GreedyRates

Akash says:

Understand the credit card part. Thanks. But how the credit score work with Line of credit?

The GreedyRates Team says:

Hey Akash,

Good question. If you have a line of credit, then you won’t encounter the same hard limits as you would on a credit card—no set schedule in which you need to repay the funds borrowed. Though it is very flexible, you’ll still have small minimum payments (set by your bank) that you need to make, and if you miss these payments or consistently pay the interest exclusively (instead of the principal) then this will hurt your credit. CIBC, for instance, has a 3.00% (or $60—whichever is greater) minimum monthly fee when you decide to use your LoC, and ignoring this puts your credit in jeopardy as well as your good standing with the bank.

Essentially, most financial products have a built-in set of rules that you need to follow to stay in their good graces and also keep your credit on the up-and-up. If you have any other inquiries or questions about lines of credit, let us know!

GreedyRates

Bob Hannah says:

I almost never run a credit card balance, and pay my monthly bill off a day or 2 before due date to be sure to avoid interest charges. So even if I have a bill of 50% of my authorization, if I pay it off a day before due date does that mean the bank sees my utilization as zero?

The GreedyRates Team says:

Hey Bob,

Perfecting the credit utilization balancing act isn’t as hard as you’d think. Ideally you should aim for 30% utilization, but you’re correct that it is first important to understand how the bank defines “utilized” credit. It’s definitely smart to pay your balance in full each month, especially if you have good credit, but if you’re trying to boost your score then it’s worth letting the bill come due while you still carry a balance. If you pay the entire balance before your bank sends the monthly statement, then it doesn’t “see” that you’ve used your credit limit at all.

Use 30% of your limit each month and let the bill come due, then pay it before interest is applied. Carrying the balance to the next month and accruing interest on that 30% is also fine, but no more than that. By no means are you required to pay interest, however, in order to see your score go up. This is just one factor of many concerning how banks determine creditworthiness, and if you want to learn more about it then we suggest watching this video about credit scores. Enjoy!

GreedyRates

Gina says:

The bank is sending me letters wanting to increase my borrowing amount on my low interest visa. If I accept the offer increase does that affect my credit score either to the negative or the positive?

The GreedyRates Team says:

Hi Gina,

Excellent question. The real thing that affects your credit when you increase your borrowing (credit) limit is your altered credit utilization ratio. You’ll suddenly have a higher total credit limit, and it won’t automatically be in use, meaning the ratio of utilized to unutilized credit will go down. This is healthy for your credit because it shows the bank you aren’t desperate enough to constantly be touching the ceiling of your approved limit. What you do after you get the new credit limit room is also watched closely by the bank.

Ensure you stay at that optimal 30% utilization threshold by not letting more than 30% of your balance come due at the end of the month. You can carry 30% as long as you like, and still be considered favorably by the bank, but more than this isn’t recommended. If you need to use upwards of 50% of your credit limit, just make sure that you pay it down before the bill is sent. Good luck!

GreedyRates

Jean-Jacques says:

Someone told me that paying off credit card BEFORE the end of the billing cycle will not be calculated in the credit score, but paying after the full month (but on time) will have a better impact to my credit score. IE: Paying off something I just bought immediately vs Paying it off after the statement comes in (but still in on time).

The GreedyRates Team says:

Hi Jean-Jacques,

This is a great comment, and we’ll address it in parts to explain in the best way possible. First, a general rule to follow is that banks see the actual utilization of your credit as the most positive correlation with your score. This is what your friend was describing to you: if your bank gives you a $5,000 credit limit and you only spend a few thousand each month and pay it off 100% before your bill comes due, to the bank it looks like you’re not using your credit at all. You might be spending up to your full limit each month, but if you pay it off before the bank is able to bill you, your “utilization” is at 0%.

Second, ideally, you’re aiming for 30% utilization, which means when your bill comes due (or is carried over to the next month), it’s only for 30% of your total approved credit limit. For a $5,000 credit limit that means you’re letting the bank bill you at the end of the month for a $1,500 balance. This is good for your credit, and you’re then able to pay it off before it’s due to avoid interest.

You can also let that 30% amount collect interest and then pay it off in one of the following months, just as long as you aren’t carrying more (and include interest charges in your calculation of 30%). This is even better for your credit and shows banks not only that you’re able to use credit, but also that you can do so responsibly and profitably for them. Hope that helps.

GreedyRates Staff

David says:

Is credit utilization based on a total of all credit limits (credit cards plus line of credit) or I need to keep each credit product utilization below 30%? I keep some credit cards that I never use (0% utilization) to increase the length of credit card. 0% utilization will hurt credit score as well?

The GreedyRates Team says:

Hi David,

Thanks for asking this question, it’s a good chance for us to provide some clarity on an idea we talk a lot about. The 30% credit utilization rule is something that applies to all your available credit and is meant to show the bank that you’re a responsible—but profitable—potential customer. When they look at your credit for an application, they’re looking at the entire thing, so even if you’re using the full credit limit on one credit card, as long as your overall credit utilization is around 30% then it still looks good.

Technically, utilized credit means that you’re carrying it month to month, not that you’re only allowed to spend 30% of your available credit. Feel free to use 100% of your credit but pay off at least 70% of it before your statement comes due. Remember that the 30% rule is a guideline, not a hard rule. The only idea that is always true is that lower utilization is better. Good luck and let us know if we can help in other ways.

GreedyRates

Blair says:

I don’t understand what and who exactly determines what scores, and what different score ratings are correct. I had my credit score drop 40 points with no different change in my account behaviour. I talked to visa, scotia, and transunion. Transunion says they dont actually do a score, and just give monthly credit reports to scotia. Then scotia uses thei own model to generate the score they show you on their app, which they claim is a transunion score. I have no idea what model or factors they use, and they say it’s just based on transunion. Then there’s the fact that there are likely other scores or ratings by seperate models if I were to compare and contrast. I dont’ understand the risk-reward-rating-report-score process at all nor was the article clear. It tries to make credit rating seem like this tight exact process that is universal and logical if you follow ‘x’ thing but the reality isn’t like that. So where is the real information for these difficult details and accountability and transparency?

The GreedyRates Team says:

Hi Blair,
We understand that comprehending your credit score, and why it moves up and down the way it does, is a frustrating and seemingly obscure process. Just keep in mind that companies such as Equifax and TransUnion are not the end-all-be-all authorities of the financial world. Each has its own strategy to determine your score, and even though they largely have access to the same data they may not be in sync with one another. Their job is merely to assist banks in connecting the dots and vetting applicants for credit, but also to help Canadians understand how these banks see their creditworthiness.

Through testing and the process of elimination, not to mention educational literature from these credit bureaus, it’s easily demonstrable over time how different things impact your credit. Their models are their own—we’re not sure why a TransUnion rep would say they don’t “do a score”. If you’re puzzled about the status of your credit and want answers, we suggest that you pay for a full comprehensive credit report from one of the main bureaus. There are also consultation services out there which help you narrow down and dispute any of the items that you don’t agree with on the report.
We hope you’re able to track down the source of that recent 40-point dip in your credit. Let us know how the situation progresses.

GreedyRates

PJ says:

Which credit cards in Canada allow you to add an authorized user to improve their credit?

The GreedyRates Team says:

Hi PJ,

Unfortunately, we don’t keep a comprehensive, updated list of which banks offer this feature to their cardholders. Most banks (virtually all of them) allow secondary users on their credit cards, which help the primary user to collect more rewards points for example, and which also may have an impact on those secondary users’ credit scores. This is something to take up with the bank, however, so begin your search as if this wasn’t a criteria at all. Pick a card that you and the authorized user both like, and then before applying call up the bank and inquire about this arrangement.

GreedyRates

Roderick J Denley says:

it is ridiculous that in the shared commerce of usa and canada neither country has a reciprocal credit arrangement Equifax for example has a canadian subsidiary but nether branch can interact with each other. ie,, i have a USA Fico score of 819 out of 850 and it is worthless for doing business in Canada even though Sault. Ste Marie is a sister city in both countries !!

The GreedyRates Team says:

Greetings Roderick,

Great comment. We agree that it’s very inconvenient for two countries who share such a good relationship to not also have any relationship between their credit bureaus. US citizens like yourself who have great credit should be able to transfer their financial reputation, but will unfortunately need to start at 0 in Canada. While you can ask your bank to transfer your account to a Canadian version, if applicable, it won’t transfer any details of your history or credit score.

Thankfully, it won’t take too long to demonstrate good financial behavior to Canadian banks. Pick up a couple Canadian credit cards and do what you’ve always done—buy, borrow, pay back on time, and keep a healthy credit utilization ratio. If you need any guidance on the Canadian credit card world, we’re always here to help out.

GreedyRates

A.S. says:

You always try Amex, they apparently have a program of transferring your history with them to move countries if necessary – but that’s on the issuer side and not on the credit bureau side.

The GreedyRates Team says:

Hi A.S.,

That’s correct. If you’re an Amex cardholder, the issuer will help you get ahold of a Canadian Amex card of similar caliber if you can prove to them that you’re a citizen. This is an internal process available only to Amex members, and doesn’t do anything for your Canadian credit score besides help you to obtain a tool to establish credit in the first place. It does not transfer your credit score in your previous country to Canada. Amex will save your information after you move, and so when you apply via their site for a new card, simply use your existing account number and put your new Canadian address and number on the application. Just disregard the field for Canadian credit.

You can also call Amex’s Canadian Global Card Transfer team, and they’ll complete the process for you over the phone. This is a great option for long-time Amex cardholders, but doesn’t apply to non-Amex members obviously, and not for all countries either. Thanks for coming and helping to enlighten our other readers about this feature! Much appreciated.

GreedyRates Staff

Marc says:

Hi, im 18 and applying for credit for the very first time. Im thinking of using Home Trust Visa and giving them money for a cash secured card. My question is this, if i dont use my SIN when applying for my very first credit file, is the credit provider able to still create my first credit file for me? And in the future when i apply for other cards or a car lets say, will i still have a searchable credit file?? I was told by my bank that the SIN is always optinal in Canada. Is this true? Thanks for the information.

The GreedyRates Team says:

Hey Marc,

The Home Trust Preferred Visa card is an excellent beginner card, as it has a $0 annual fee, 0.00% foreign transaction fees (which are usually 2.50% or more when spending money in a foreign currency) and 1.00% cash back on all spending. That’s a trifecta which is tough to beat, but it’s not a secured card. Are you considering picking up both the Home Trust Preferred Visa and the Home Trust Secured Visa? If so, that’s not a bad idea. You can expand your total credit limit this way, simply by making a security deposit of at least $500, as well as enjoy unsecured credit.

You don’t need to give your SIN on the application if you don’t want. The information you provide is enough to confirm your identity and the credit profile associated with it, so even if you apply for a card without your SIN it will still contribute to your credit score. Hope that helps!

GreedyRates