Ultimate Survival Guide for New Immigrants to Canada

December 4, 2021

How to Maintain a Good Credit Score

What is a credit bureau?

A credit bureau is a company that collects information relating to the credit ratings of individuals and makes it available to credit card companies, financial institutions, etc.

a) Does the credit bureau make lending decisions? 

No. Whether you'll get financing or not directly depends on the lender or the bank. Credit bureaus only report your credit standing to your lender, to help them make better decisions.

b) What information is reported to credit bureaus?

  • Personal information such as your name, address, contact info, etc.
  • Inquiry information: when you apply for a loan or financing, your lender will initiate a hard inquiry. Every hard inquiry is reported to the credit union and you may expect to see a drop in your credit score in the next evaluation.
  • Public record and collections information.
  • Credit account information: all your credit cards and accounts will be reported.

c) Who can access your credit records?

Your bank, insurance company, or financing agency can access your records upon request. Banks also use this information for pre-approved credit limit upgrades or offering pre-approved credit cards.
If you need to get a new phone or a new car, your financing agency will initiate a hard inquiry and get the desired information to make lending decisions.

Why is Credit Score Important?

A credit score is a number that indicates how risk entailing lending money to an individual is. A typical score is represented on a scale from 300 to 900. High scores on this scale are good. The higher your score, the lower the risk for the lender. Individuals with higher credit scores often get better interest rates and easier terms in long-term borrowing.  You can check your credit score anytime on your bank's website or application. This is free and doesn't drop your credit score, as it is considered a soft enquiry.

Credit Score CIBC Equifax

Credit Bureaus in Canada?

Canada have the following credit bureaus -

  • Equifax
  • TransUnion
  • Experian
  • Dun & Bradstreet

Equifax and TransUnion are the leading ones and hold the majority of market share.

Which Credit Bureau is Better for Students?

Hands down, Equifax is a better option for students. This is clear from my personal experience and a few testimonies. We'll discuss it in the following sections.

Which bank/organizations uses Equifax?

  • CIBC
  • BMO
  • Borrowell
  • Capital One
  • Citi financial The Home Depot cards etc
  • Dell Financial
  • Desjardins
  • Future Shop/Chase
  • HSBC
  • ING
  • PC Financial
  • Scotiabank
  • TD
  • Telus Mobility/Koodo Mobile
  • Bell Mobility/Virgin Mobile

Which bank uses Transunion?

  • Scotiabank
  • BMO
  • Capital One
  • Amex Bank of Canada
  • Canadian Tire
  • Laurentian Bank
  • National Bank
  • Bridgewater Bank
  • CAA Mastercard
  • Rogers Wireless/Fido
  • Royal Bank
  • Vancity Visa
  • Wal-Mart MasterCard

What is considered a good Credit Score?

As a new immigrant, you start with a credit score between fair and good. Gradually the credit score increases and should be in the range of excellent by the end to 1-1.5 years. This is the case with Equifax. Transunion treats students somehow differently and doesn't increase the credit score that quickly. So, personally, I would never recommend Transunion to anyone. At the end of the day, your score matters more than the credit union you are with. Lenders treat scores somewhat in a similar way. Therefore, the higher you get to the top, the better it is.
I was never able to crack the code to Transunion's system and there isn't much information available in the public domain.

  • Excellent: 741-900
  • Good: 713-740
  • Fair: 600-712
  • Poor: 300-659

Ideally, you should be in excellent or good. If you are not, even after 1-1.5 years, you are certainly doing something wrong.

What should I do to maintain a good Credit Score?

I am reiterating things from my personal experience and knowledge of finance. If you need to have a look at a more authentic source, here is a link to Govt. of Canada's website. I have used the following tips, which have worked for me perfectly fine. I have not seen any credit drops yet.

  1. Never borrow more than 35% of your credit limit: This keeps your credit utilization ratio in check. This also shows that you are not into impulse buying and exhausting your credit limit.
    Suppose you have a credit limit of $1000. Try not to get over $350 in a given billing cycle. A higher credit utilization ratio indicates to the lenders that you entail a 'greater risk'.
  2. Never apply for more credit cards: This is by far the biggest mistake many induvial make. Opening a credit card needs a hard inquiry. A hard inquiry drops your credit score. Having more than one credit card affects your credit utilization as well. Too low credit utilization isn't good. For example, John has two credit cards with a $1000 limit each. John borrows $200 using each card. His total credit utilization is 400/2000. Had this been on a single card i.e. 400/1000, it would have been considered better. Therefore, credit utilization should not be too high or too low.
  3. Avoid unnecessary credit checks: Buying a post-paid mobile plan or phone requires hard inquiry. This is something that is absolutely avoidable. You can buy a phone using your credit card and pay it off in installments. Going through a hard inquiry only for a phone plan doesn't make any sense to me.
    A leading mobile carrier called me once and gave me a very lucrative offer. I was almost into it, but when they mentioned that they need details for a credit check, I backed off.
  4. Never pay before the statement is posted: Suppose you have brought a pack of coffee for $10 today, and you are paying those $10 tomorrow, it makes no sense. This transaction is not going to get reflected on your credit statement. You must wait at least till the statement is generated and then pay it off.
  5. How much time do I have to pay back: you have 21 days to pay back, interest-free. For example, I got my statement on Jan 1, then I have 21 days to pay it back. Keep in mind that the Jan 1 statement is your usage from the last month i.e. December. You can continue to use your card. Your Jan's usage will be reflected in your Feb statement.

Equifax vs Transunion

TransUnion and Equifax, like all credit reporting companies, use proprietary scoring models. While most credit scores are based on the same or similar characteristics, such as payment history and the number of accounts in good standing, each credit-scoring model might weigh those factors differently. Not every credit-reporting agency will have all of your personal information. Some lenders may report to all three major credit agencies, while others may only report to one or two of them. Moreover, a lender may send changes to several bureaus at different times. As a result, it's likely that Equifax and TransUnion have different credit information on your reports, resulting in a disparity between your TransUnion and Equifax scores.

Though this is something more advanced, but you can take my word that "starting with Equifax is a better option, irrespective of the opinion of those who classify them as similar". You need to leverage the system to your advantage.

First-hand experience with EQUIFAX

I started with Equifax in 2020. My initial credit score was somewhere in 'fair'. Within 1 year managed to get to 'Good' and right below excellent. In the next few months, I was in 'excellent'. At this point, the improvements in my credit score have slowed down quite a bit. Now they increase by 8-10 points in any giver quarter. I am pretty happy with my score considering the fact that many of my colleagues, who had an account with Scotiabank/Transunion are still in Fair. That's after 2 years of paying your bills on time and doing everything right.

Credit score history CIBC, Equifax

Not just the credit score, I was pre-approved for credit limit upgrade multiple times, and my credit limit reached $10,000. I started with a $500 credit limit.
Most of my counterparts in scotia bank are still stuck on a $1000 credit limit.

First-hand experience with Transunion

I'll share the experience of my friends without naming them due to privacy concerns. Both have an account with Scotiabank.

Friend A

Been with Scotiabank/Transunion for about 2 years as a student. Now, he is working full time. Still stuck to a credit rating in 'good' and credit limit of $2000. This is when he changed his status from student to full-time employee. After looking deep into the financial statements, I never found a valid reason to justify this.

Friend B

Been with Scotiabank/Transunion for 1 year as a student. Stuck to a credit limit of $500 and credit score in 'fair'. Considering that it would take him years to get a decent credit score and credit limit, he switched to Equifax.


Since Scotiabank is the largest bank in Canada, it often becomes the first priority for newcomers. Newcomers often take a hit on their credit limit and scores for no apparent reason. Additionally, there every bank operates in a similar way, so there isn't any apparent reason for choosing one over the other. The only major difference that I have seen in the past few years lies in credit score/rating. I believe that being able to achieve a better credit score faster, would save you some time down the road trying to improve it and then apply for financing properties or assets.

Have Questions? Feel Free to Reach Me