Tuesday, August 7, 2012

Will Bad Credit Follow Me to Canada?

Reader Question:


I am getting married next month and moving to Canada. I have horrible credit and was thrilled at the idea of getting a fresh start in a new country. But then I found out that the credit reporting agencies are the same in Canada as they are in the U.S. Does this mean my bad credit is going to follow me to Canada? I don't want to mess up my fiance's good credit because of my past mistakes. Help!

Miranda B. 


You're right about the fact that both Transunion and Equifax provide credit reports in Canada as well as the U.S. (Experian no longer maintains a Canadian reporting branch) but you can rest easy, the Canadian and U.S. branches of Equifax and Transunion don't swap information and you will get your fresh start. Let me explain...

American credit reports are primarily tracked using Social Security numbers. Canadians don't have Social Security numbers, they have Social Insurance Numbers. Merchants cannot use a Social Security number to pull a Canadian credit report or use a Social Insurance number to pull an American credit report.

Now, I dare you to walk into any bank in your area, ask for the bank manager and ask if they can pull a Canadian credit report. The bank manager is going to tell you yes. Why? Because he's thinking along the same lines as you – the credit bureaus are the same, so its got to be possible. But it isn't. Every bank manager, and I do mean every bank manager (and loan officer, and mortgage lender...yada yada) will argue until they are blue in the face that it can be done. And every one of them would be wrong.

Back in 2009 I participated in an nationwide survey of 17 major banks on just this subject. Every individual I spoke with said they could pull a Canadian credit report by plugging the applicant's Social Insurance number into the system. It failed every time. Here's why: The American and Canadian credit bureaus are set up differently. The data that appears on your credit report in the U.S. won't show up on your credit report in Canada. The credit bureaus are the same, but the computer systems are different enough to prevent information from being exchanged back and forth.

Bad credit in the U.S. doesn't transfer to Canada

This may seem illogical, but it benefits the credit bureaus. Can you imagine what a mess it would be if information were interchangeable? Can you say international lawsuits galore? It's in the credit bureaus' best interest to keep everything separate.

After you get married and obtain permanent residency in Canada, you will be assigned a Social Insurance number. Then, and only then, can you begin building a credit report with our neighbors to the north. Keep in mind that if your current creditors are aware of the fact that you are no longer in the country, the information on your credit report will be "tolled" (i.e. "frozen") and won't age off your credit report. Should you ever return to the U.S. to live, the bad credit you left behind will be there waiting for you.

Oh, and one more thing – even if you were to get married  here and remain in the U.S., your fiance wouldn't "inherit" your bad credit just by marrying you. Neither American nor Canadian credit reports merge when you marry. The only accounts of yours that would appear on your fiance's credit report after you marry would be joint accounts that the two of you share, like a mortgage or joint credit card.

So to make a long story short, no, your bad credit won't follow you when you move to Canada. You'll get to start from scratch and build a brand new Canadian credit history. And congratulations on your upcoming marriage.

Best of luck,

*Do you have a question for Lee? Send an email containing your question to LeeEdwards@mail.com and your question may be the subject of an upcoming post. 


  1. hi im applying for immigration to canada from uk and have bad debts from about 5 years ago will this hamper my visa application

  2. I'm not familiar with immigration law outside the U.S., but I do know that, when it comes to immigration, governments are generally concerned only with issues that would impact the country itself. Canada, for example, can turn down your permanent residency application based on chronic health problems because those issues would be a drain on the country's single-payer healthcare system. Because your foreign debts have no impact on the country you're moving to, I can't see how they would matter.

  3. hello there. I curenlty move to USa. I have 26g in debt in Canada. Can they bother me.

    1. My first instinct is to say no, but the fact remains that my expertise is limited to the U.S. I don't know nearly as much about Canadian debt collection policies. Part of the reason for that is that here in the U.S., many of our consumer protection regulations are federal – that is, they apply to all 50 states. Specifics such as the statute of limitations, etc., are determined by the states but most of its federal.

      In Canada, most major debt collection regulations are provincial. Each province has a different set of rules. You don't mention which province you incurred the debt in, what type of debt it is, etc. Either way, I strongly recommend you find a Canadian credit expert to answer this question. I just don't feel comfortable doing it because I don't have the experience with Canadian debt collection laws to back myself up.

  4. I bought a timeshare in las vegas last year and Im from canada. If I stopped paying it can they report this to a canadian collections agency and affect my credit here?

  5. Hi Lee!
    I have a $9000 credit card debt in the US and I am planning on returning to US as a visitor next year. Will the past credit card debt affect my visa application?

  6. Lee:

    So no debt from America can be collected in Canada? It will be a brand new start, regardless of whom I owe debt to?

  7. Hi! If I have a debt in the USA and aply for a Canadian Visa, will i get in trouble and be refused? I would add that I'm not an american, neither I live in USA.

    1. Canada doesn't care whether you owe money to a collector or didn't pay your credit card bill. Their main priorities are ensuring that you don't have a criminal history and that you are healthy enough that you will not pose a drain on their National Healthcare System. I can only speak for how debt works going from the U.S. to Canada. I would, however, assume that it would be even more difficult for other countries to pursue debts this way--especially if you're coming from overseas.