We recently received a very good question from a foreign-exchange student who’s going out-of the united states. He asked if the credit established in the U.S follows an individual, in this case to Canada. This is what we found through our study.
SSN vs. SIN
In the United States, individuals are recognized by their social security number (SSN). There is no other person in the United States with the identical SSN. In Canada, individuals have social insurance numbers (SIN), which serves the same purpose. Credit bureaus in Canada make use of the SIN to keep an eye on individual’s credit reports. Since the U.S and Canada are two different countries, SSN’s cannot be tracked in the Canadian systems and SIN’s cannot be tracked inside the U.S systems.
Within the United States Of America, you will find three main credit bureaus: experian or equifax. These three agencies present scores and credit reports for many people with a social security number who have opened a line of credit or a loan. Canada’s credit reporting agencies follow exactly the same procedures.
In Canada, the three major credit bureaus are Equifax Canada, TransUnion Canada and Northern Credit Bureaus, Inc. In many scenarios, people have found that the United States TransUnion and the Canada TransUnion share the same data within their systems. In effect, there could be a chance of a Canadian financial institution taking your U.S credit rating. This could be good for people with positive credit and poor for those with not good credit. Equifax may share their data between countries and do the same. We have discovered that Experian has no influence in foreign credit since it only conducts reports on U.S residents. Exactly the same applies for Northern Credit Bureaus and its Canadian residents.
So far as credit ratings go, experian vs equifax have both implemented the FICO system from the Usa. The only real difference being is fico scores in Canada range between a report of 300 and 900. Results in the United States use a range of 300-850.
Scores closer to 900 are a lower risk for the lenders, which could mean a lower interest rate to the client. The other may be said for results closer to 300. These results would be a much higher risk for the lender and in outcome would mean a higher interest-rate for the borrower.
If I do not have an am and SIN a citizen, how do I make an application for credit if I move to Canada?
Exactly like in the U.S, in Canada it’s hard to obtain credit without a credit history. You can go inside a Canadian bank and explain your situation to them. Some banks in Canada may ask for some data from your U.S credit report. This will enable them to make an easier and faster decision to issue credit. Some may possibly provide you a secured credit card that will help you build a credit record by depositing a certain sum on a pre-paid credit card and then make payments.
Also, as stated above, TransUnion may have the capability to exhibit U.S credit history information to Canadian banking institutions because of shared information between TransUnion Canada and the United States TransUnion.
What if I want to move to Canada for a long time frame and then move straight back to the United States?
In the event that you are not planning on being a long-term resident or aren’t planning on buying a home, it could be best to stick to Usa based international bank cards. Credit card companies with affiliates in the U.S and Canada would work best. These cards will work in both places but will only report to the U.S credit reporting agencies.
More details can be found here.
No matter where you move, it is best to maintain a good credit history. If your new country of residence decides to take a look at your U.S credit rating you would like to make sure it’s clear of negative information. However, one can’t assume that a good U.S credit history may help establish new credit internationally.