If you’re in the process of moving to the United States, or anywhere else, you might be wondering if your credit history will be coming with you. Unfortunately, credit information cannot be transferred to another country because there are legal and practical implications. The good news is that you can build credit in the U.S. when you get there, the same goes for most other places. Once you have some credit history under your belt, you can start working towards your financial goals. Let’s explore more of the credit implications when you leave Canada.
Can I Transfer My Canadian Credit History To The U.S.?
As mentioned, the answer is no, Canadian credit history cannot be transferred into a U.S. credit history. The reason why basically boils down to the fact that credit information cannot be transferred across national boundaries due to legal and practical issues.
Why Can’t I Transfer My Canadian Credit History To The U.S.?
While TransUnion and Equifax exist in Canada and the U.S., there are still certain laws and regulations that prohibit the transfer of Canadian credit histories to the States. Here are some reasons your credit history can’t move with you:
Different Credit Report Requirements
There are legal implications involved with transferring credit history information across national borders. Credit reporting laws differ from country to country. This means that the existing credit report you have in Canada would have to meet the credit reporting requirements of the U.S., which are governed by the U.S. Fair Credit Reporting Act requirements.
Credit Report Information Is Different
The information within a credit report is drastically different from country to country which is why the transfer of information is so difficult. As an example, some countries report on all the individuals within a household in one report while others have a unique report for each individual. Moreover, some information that’s included in your Canadian credit report may not be included in a credit report in another country.
As such, if credit history information could be transferred from Canada to the U.S., it would have to be adjusted to meet the U.S. credit reporting laws. The same would go for any credit information transferred between two other countries. It would be extremely challenging and time-consuming to convert historical credit data to meet U.S. standards which is why it isn’t done.
Technological Barriers
Technological resources used for credit reporting can greatly differ from one country to another. Transfer between two countries simply might not be possible if the systems and software are not compatible.
What’s The Difference Between Canadian Credit and American Credit?
| Canada | U.S. | |
| Credit Score | Ranges between 300 – 900 | Ranges between 300 – 850 |
| Credit Bureaus | TransUnion and Equifax | TransUnion, Equifax and Experian |
| Credit Rating | Credit accounts are assigned a number from 1-9 and a letter, either I, O or R. | Doesn’t exist in the U.S. |
Are There Similarities Between Between Canadian Credit and American Credit?
Similar to Canada, in the U.S., credit bureaus collect and create reports using your credit information. This information is submitted by lenders, credit card companies, banks, and other institutions that you have a financial relationship with. These lenders are not required to submit information, but they choose to. Using the collected data, the credit bureaus will create a credit report and calculate your score. Whenever you apply for financing, potential lenders will pull your credit report to aid their decision-making process.
How To Build Credit History In The U.S.?
Even though credit history cannot be transferred from Canada to the U.S., there is an opportunity to build credit from scratch in the U.S. While it’s not ideal to start from scratch, you will likely build credit fast with your experience and knowledge of credit in Canada. Let’s explore how you build credit in the U.S. further below.
Create A Financial Foundation
In order to start building your credit in the U.S., you may need access to certain basics to get approved for a loan. This may include a Social Security Number (SSN), bank account, and a job. A Social Security Number is essentially the American version of a Social Insurance Number (SIN). Having an open and active bank account is another item lenders may require when determining your eligibility for the loan. Having a job will also make it easier to obtain financial products such as credit cards and personal loans.
Ways To Start Building Credit History
Now that you’ve established yourself in the U.S. and have obtained the basics, you can start building a credit history.
- Get A Credit Card – A credit card is a simple way to start building a positive payment history. There are a number of U.S. credit cards that are designed for individuals with poor or no credit history such as the Petal 2 Visa credit card and the Capital One Platinum credit card.
- Get A Secured Credit Card – If you’re having difficulty obtaining a regular credit card since you have no credit, consider getting a secured credit card. These cards almost guarantee approval, you simply need to provide the minimum security deposit. Once approved, you can use the card like a regular credit card. Payments will be reported to the credit bureau(s), which will help you build your payment history.
- Become An Authorized User On Someone Else’s Credit Card – Being an authorized user on someone else’s account will add to your credit history without you having to do anything. Be sure to ask a friend, family member or someone you trust when becoming an authorized user. If the individual has poor financial habits that will reflect on you.
- Pay Your Rent On Time – The U.S. has a number of services that report rent payments to the three major credit bureaus, so be sure to pay your rent on time and in full to build healthy credit.
- Use Credit Building Tools – There are many services like Experian Boost that can help you build your credit. For example, Experian Boost lets you add your cell phone, streaming subscriptions and utility payments to your credit report.
Establish And Maintain Good Financial Habits
To ensure that you build a healthy credit history, establish and maintain good financial habits. For example, you should always pay your credit card and other debts on time and in full. Also, try not to use more than 30% of your available credit to keep your credit utilization ratio low. If you had a good credit score in Canada, bring the financial habits you use to build it with you to the U.S.
Bottom Line
Even though you’re moving to the U.S, your credit information and report will stay here. Unfortunately, that means you’ll need to build your credit from scratch in the U.S. The silver lining is you won’t be building credit forever so long as you start building credit as soon as you get there.
