How to build your credit history and increase your credit limit in Canada

When you have a strong credit history, life in Canada becomes easier. That history helps as you set up bank accounts, get credit cards and take out loans.

These benefits have traditionally been out of reach for newcomers. That’s because Canadian credit bureaus don’t recognize credit history from other countries. That means you have to start from the beginning, no matter how financially responsible you’ve been.

Scotiabank is helping make it easier for you to bring your credit history with you to your new life in Canada. Learn more about how credit works in Canada, how to build your credit score, and how to help increase your credit limit.   

A strong credit history is important in Canada. Your credit history is represented by a credit score. A credit score is a three-digit score that represents your creditworthiness. This number helps shows how likely a credit bureau thinks you are to pay your bills on time. In Canada, credit scores range between 300 and 900. The higher the score, the more creditworthy most lenders will consider you to be. 

A good credit score will help you with everyday tasks like opening a cell phone account or getting a credit card. It can even help you buy a car or get a mortgage.

When you’re new to Canada, you traditionally start with no credit history and then build it through the years. When you’re new and starting with a lower credit score, it’s challenging to do things like raise your credit card limit, which can actually help improve your score.

Through Scotiabank’s unique partnership with Nova Credit, credit-building is becoming more accessible to newcomers. Starting in September 2024, if you are eligible, you can leverage your home country’s credit score to access higher credit limits.¹

Nova Credit is a cross-border credit bureau that operates in Canada, partnering with lenders who provide products and services to newcomers. Using Nova Credit’s Credit Passport, you can apply your credit history from your home country so you're not starting over. Your financial record will contribute to your application and may help you start with a higher credit score in Canada. This service is available to customers who have been in Canada for less than 2 years and are from an eligible country.^1,2

Learn more about the pros and cons of increasing your credit card limit.

To understand how to build your credit history, you first need to understand the information that the credit bureaus collect and how they use it. Some common factors that affect your credit history are:

• Payment history
  You can help build credit by paying your bills on time and in full. If you need to carry a balance, make sure you pay the minimum amount by the due date.
  
  
• The types of credit you have
  The more types of credit that you can manage responsibly, the better. If, for example, you have a car loan, a line of credit, and several credit cards, it may demonstrate that lenders can trust you to carry multiple products and pay off several creditors.
  
  
• How long you have had credit
  Generally, the longer you’ve had a credit account of any sort, such as a telephone line or a credit card, the better.
  
  
• How much credit you have, and how much debt you carry
  Pay attention to your “credit utilization” or how much credit you have versus how much debt you carry. Creditors tend to worry if they see that you’re nearing your credit limit. In general, you should try to keep your debt to 30% or less of your available credit.³ Increasing your credit card limit, when managed properly, is one way you can optimize your credit utilization.

Building your credit history takes some practice and should be part of your financial plan.

Once you decide you’re ready to apply for a credit limit increase, it’s easy with Scotiabank. You can call, get help in person at your branch, or use your computer or mobile app to apply.

If you’re applying online, here are the steps:

1. From your Accounts page, select the credit card you want an increase on
2. Select "Additional Services"
3. Select "Increase Your Credit Card" and follow the instructions
4. Typically, this involves confirming your current income and giving permission for Scotiabank to perform a hard credit check

That’s it!

If you’re not yet a Scotiabank customer, the Scotiabank StartRight^® Program should be your first stop. With it, you can open an everyday banking account, send unlimited international money transfers, apply for a credit card and find helpful financial advice—all for newcomers to Canada.

Being a newcomer shouldn’t set you back. Scotiabank is the first bank in Canada to let you use your home country’s credit history, so you don’t have to start over as you are beginning this next chapter of your life. Start building your future in Canada with the credit score that you built back home.