The issue of obtaining credit without a credit history is one of the most pressing for many Edmonton residents, especially new immigrants, young people just starting out on their own, and students. The Canadian financial system is built on credit history as the primary indicator of financial responsibility, so the lack of this history can seem like an insurmountable obstacle. However, the reality is much more optimistic than it may seem at first glance.
The short answer to this question is yes, it is possible to get a loan without a credit history in Edmonton, but the approaches and options available differ from those available to people with an established credit history. Canadian financial institutions and alternative lenders have developed numerous products and programs specifically for those who are just starting their financial journey in the country. Understanding these options, their advantages, and limitations is key to successfully starting your financial history in Canada.
Understanding the Importance of Credit History in Canada
Before considering ways to obtain credit without a history, it is important to understand why credit history is so important in the Canadian financial system. Credit history and credit scores are the primary tools lenders use to assess your creditworthiness and determine the risk of extending credit to you.
Credit scores in Canada range from 300 to 900, with most lenders considering a score of 660 and above to be good, which corresponds to Equifax's ranges. A score between 300 and 579 is considered poor, between 580 and 669 is fair, between 670 and 739 is good, between 740 and 799 is very good, and between 800 and 850 is excellent.
Your credit score is determined by five main factors, although each credit bureau uses a unique calculation. The most important factors are payment history (35% of your score), credit utilization (30%), length of credit history, types of credit, and number of new credit inquiries.
For new immigrants, the biggest challenge is that Canadian credit bureaus do not have access to international credit histories. Even if you have a long, impeccable credit history in your country of origin, it does not automatically transfer to the Canadian system. This means that you are essentially starting from scratch, regardless of your previous financial experience.
Specialized programs for newcomers
Canadian banks recognize the challenges faced by newcomers and have developed special banking packages and credit products for this audience. These programs allow you to open a bank account and obtain a credit card even without a Canadian credit history.
RBC Newcomer Advantage offers a solution specifically designed to help newcomers settle into Canada more quickly. The program includes no monthly banking fees for one year, credit cards with a limit of up to $15,000, zero fees for transfers, and unlimited debit transactions in Canada. Some RBC credit cards, such as the RBC Avion, are specifically designed to support newcomers and do not require a Canadian credit history to apply.
The Scotiabank StartRight Program provides newcomers with up to $2,300 in value during their first year. The program allows you to open a Preferred Package checking account with no monthly fees for the first year, after which a minimum balance of $4,000 or a $16.95 monthly fee is required. Newcomers can earn up to $700 when they combine the appropriate banking package, savings account, and registered account.
The TD New to Canada Banking Package helps newcomers open a chequing account, savings account, and apply for one of three credit cards. The package allows you to open a TD Unlimited Chequing Account, which provides unlimited debit transactions and Interac e-Transfers, no fees at TD ATMs, and no monthly fees for a whole year.
The BMO NewStart Program is available to those who have arrived in Canada within the last five years. The program allows you to open one of three BMO bank accounts. The Plus Chequing Account provides 25 free debit transactions per month, unlimited Interac e-Transfers, and the option to open a free Premium Rate savings account for $11.95 per month or $0 with a minimum balance of $3,000.
The CIBC Smart Account for Newcomers includes unlimited daily banking and Interac e-Transfer transactions, one free non-CIBC ATM cash withdrawal per month, and no monthly fees for two years. To qualify, you must arrive in Canada within the next 12 months from an eligible country, have a valid passport and UCI issued by the Government of Canada, and be of legal age in your province of arrival.
National Bank's offer for newcomers allows you to open an account with no fixed monthly fees for up to three years, saving you over $500. The program helps those without a credit history get settled in Canada with a National Bank of Canada Mastercard credit card. The program also offers international transfers and access to legal support free of charge.
It is important to note that while some banks may recognize your foreign credit history, this is not guaranteed. First, talk to your bank manager and ask if the bank will recognize your foreign credit history and provide you with a regular (unsecured) credit card. Be sure to bring any credit information you have from outside Canada.
Secured credit cards
Secured credit cards are one of the most effective and accessible tools for building credit history from scratch in Canada. Unlike unsecured credit cards, which provide credit in advance and require monthly repayments, secured cards require a cash deposit as collateral.
A secured credit card functions similarly to an unsecured card, allowing you to make purchases up to the credit limit on the card. However, secured cards require an upfront deposit, often equal to the credit limit on the card. For example, if you deposit $500, your credit limit will typically be $500. You use the card for small purchases each month and always pay your balance in full and on time. This helps you build a positive repayment history, which is one of the most important parts of your credit score.
Secured Neo Mastercard
Secured Neo Mastercard offers guaranteed approval for applicants who meet the basic criteria. You can start with as little as $50 and increase or decrease your credit limit at any time. As with any other card, you will need to make regular payments on time each month, and interest charges will apply if you do not pay your balance in full by the due date. The card also rewards you with up to 1% cash back on gas and grocery purchases and up to 15% back at over 10,000 Neo partners across Canada. Neo Financial offers guided credit-building tools with built-in credit score tracking to easily monitor your progress.
Capital One Guaranteed Secured MastercardCapital One Guaranteed Secured Mastercard is another reliable secured credit card option for newcomers. This card offers guaranteed approval for applicants who meet the basic criteria and reports your payments to major credit bureaus, helping you build credit in Canada. Users describe it as “the easiest to get,” even for those with active consumer proposals or bankruptcies. Some were surprised to get approved for an unsecured card instead—even while “knee-deep in consumer proposals.” One user noted that the card helped them rebuild their credit score to over 800.### Home Trust Secured Visa CardThe Home Trust Secured Visa Card is designed for people with non-traditional credit histories, such as self-employed individuals, students, newcomers to Canada, people with past credit issues, and self-employed individuals. Your credit limit is determined by the amount you deposit as collateral, which can range from a minimum of $500 to a maximum of $10,000. To apply, you must be a permanent resident of Canada, be of legal age in your province, not be currently bankrupt, deposit a minimum of $500 from a Canadian account in your name, and not be a resident of Quebec. Users describe it as a stable choice that is not “tied to a high-interest lender.” Users also recommend its low-interest version, which is useful “if you are willing to pay a fee” and want to avoid a high-interest balance.It's important to understand that the deposit on a secured card is not a payment — it's collateral that you'll get back when you close the card or convert it to an unsecured card. You still have to make monthly payments on the card, just like with any other credit card.## Credit cards for studentsStudent credit cards are available to students who do not have a credit history, so the eligibility requirements are more lenient. Although some student cards are only available to those enrolled in college or university, most are technically available to anyone.
Student credit cards were created with students in mind, so it's easier for people without a credit history to get approved. These types of cards also have benefits, rewards, and fee structures tailored to college students. If you are currently in school, don't earn much money, and have limited credit or no credit history on your credit reports, then a student card may be the right choice.
Capital One SavorOne Students is a great all-around card for most college students. It's a Mastercard (worldwide acceptance) with no annual fee and no foreign transaction fees, 3x on dining, groceries (excluding supermarkets like Walmart and Target), entertainment, and streaming services.
Discover it Student Cash Back offers 5% cash back on activated rotating categories (up to $1,500 in combined purchases, then 1%), and Discover will match all cash back earned at the end of your first year with the card. No credit history is required to qualify, and no security deposit is required.
Chase Freedom Rise caters to students with no credit or limited credit history. For the best chance of approval, you need to have a Chase checking or savings account with at least $250 in it within three days of applying. Chase offers 1.5% cash back on all purchases, but with a greater focus on building credit the right way.
It's important to use your student credit card just like you would a debit card — don't buy anything you can't afford or pay off right now. Make sure you pay your statement balance in full each month so you don't accrue interest.
Credit-building programs
Credit-building programs (sometimes known as credit-building loans) are another smart way to build credit. They are designed primarily to help you establish or rebuild your credit history, rather than to provide you with money up front. Most credit-building loans work like this: you make fixed monthly payments, and those payments are reported to credit bureaus. The goal is simply to build a consistent record of on-time payments, which can help strengthen your credit history and improve your score over time.
Borrowell Credit Builder
Borrowell Credit Builder is an installment loan that allows you to start building your credit with as little as $5, $15, or $25 twice a week for 48 months. During this time, Borrowell reports your payments to Equifax Canada (one of two consumer credit bureaus in Canada). If you make consistent payments and ensure that you are financially responsible with this and any other credit you have outside of this loan, your credit score should improve over time.
The program guarantees approval, does not require a credit check when you apply, does not charge interest—only a fixed program fee—provides automatic debit payments, gives you access to exclusive credit education and cashback rewards, and allows you to cancel at any time without financial penalty. Borrowell Credit Builder users see an average credit score increase of 41 points in just five months. This program is currently unavailable in Saskatchewan.
KOHO Credit Building
KOHO Credit Building allows you to build credit history with KOHO for only $10 per month without taking on any debt. To use it, you simply need to sign up for Credit Building in the KOHO app, then you need to maintain at least $10 in your spending account each month to cover the cost of the subscription. In return, KOHO will report your progress to major credit bureaus every month, helping you build your credit history and establish some trust with Canadian lenders. Users see an average credit score increase of 31+ points in just 4 months.
BMO Credit Builder Loan
BMO Credit Builder Loan allows you to borrow between $1,000 and $5,000 if you are approved. This program is designed to help people build or establish credit. You are given a fixed-rate loan, and the funds go directly into a Certificate of Deposit savings account. You can choose an amount between $1,000 and $5,000 and a term between 24 and 60 months for a payment that works for you. When the loan is repaid and the Certificate of Deposit matures, you will receive the amount you invested—plus interest.
Credit-building programs are especially useful if you are new to Canada, a student, or have never taken out a loan before and do not have a long enough credit history, or if you have a low credit rating due to a history of missed or late payments.
Rent Reporting
One innovative way to build credit history that has emerged in Canada in recent years is reporting rent payments to credit bureaus. Historically, rent payments were not considered by lenders and credit bureaus in Canada as an indicator of financial stability, which created an injustice, especially considering that rent is likely your most significant financial obligation.
In 2020, the Landlord Credit Bureau (LCB), a rent reporting agency, and Equifax, one of Canada's two major credit bureaus, teamed up to address this issue and help renters build their credit scores. To do this, the landlord — also known as the “lender” — reports the rental payment history to the LCB for collection. The LCB sends the data to Equifax, which then records this information on the consumer's credit report.
When payments are reported, the tenant can begin to build, improve, or restore their credit rating and, in turn, gain access to lower interest rates in the future when applying for a mortgage, car loan, or other credit product. In addition, as tenants develop a good tenant history, they can obtain preferred tenant status and appear favorable to future landlords.
It is important to note that in Canada, you can only report your rent payments to Equifax. Currently, only Equifax accepts rental payment history and uses the data to calculate credit scores. TransUnion does not collect rental payment information from landlords or tenants in Canada, so you will not find rental payments on your TransUnion credit report.
To include rent on your credit report, you must register with a rent reporting service such as SingleKey's Rent Credit or Borrowell Rent Advantage. Once you register and provide some basic information about your lease, your rent payments are tracked and sent directly to the credit bureaus. Your payment history accounts for 35% of your credit score, so rent reporting is a no-brainer way to give your score a healthy boost.
LCB collects rent payment information from FrontLobby, a company they partner with to facilitate the rent reporting process. You or your landlord must register with FrontLobby to report rent payment information to LCB. Your landlord must obtain your consent in Canada before reporting your rent payments to a credit bureau. This is typically done by including a clause in the lease agreement.
Co-signer on a loan
If you cannot qualify for a loan on your own due to a lack of credit history, using a co-signer can be an effective solution. A co-signer is a person who agrees to be legally responsible for paying the debt if the borrower does not repay the loan according to the terms.
A co-signer is someone whose own credit rating qualifies them for the loan. Typically, a co-signer is a family member or family friend. By signing your loan, this person demonstrates trust and confidence in you, while providing you with a way to build your own solid credit rating.
Co-signers are very common among borrowers who do not yet have a long-term financial track record. For example, if you are young or new to Canada, your credit history may not cover a sufficient period to qualify you for a loan. A co-signer with a strong credit history can help you qualify for a loan and get more favorable terms.
Before a lender approves you for a loan with a co-signer, they will want to make sure that your co-signer meets certain criteria. The most important of these is an excellent credit history. Generally speaking, lenders prefer co-signers who have a credit score in the 700s or higher. It's a good idea to get credit reports for both parties in advance so you know what to expect.
Your co-signer should also have a stable income and be able to demonstrate that they can afford to make the mortgage payments if you can't. In other words, your co-signer's debt-to-income ratio should be within an acceptable range. Finally, lenders may want to see proof of employment or other reliable financial records from your co-signer to demonstrate that they are able to cover the loan payments if necessary.
Lenders typically look for co-signers with a strong credit score (usually 680 or above), stable income, low debt-to-income ratio (usually below 35% for GDS and below 42% for TDS), and Canadian residency.
One of the main advantages of having a co-signer is an increased likelihood of loan approval. If you have a co-signer with a strong credit history, stable income, and good financial standing, lenders may be more willing to approve your loan application, even if you have limited credit or income. With a co-signer, you may also qualify for more favorable loan terms, such as a lower interest rate and higher loan amounts.
Alternative Lenders and No Credit Check Loans
When traditional banks deny credit due to a lack of credit history, alternative lenders may offer a solution. There are numerous alternative lenders in Edmonton and across Alberta that specialize in working with people who have little or no credit history.
Alpine Credits offers home equity loans that do not require a credit check. The main requirement is that you must own at least 25% of your property to be eligible for a loan from Alpine Credits. You can calculate how much equity you have by subtracting the balance of your mortgage from the appraised value of your home. A loan from Alpine Credits does not require income — traditional credit options may require a certain amount of income before approving a loan, while home equity loans from Alpine Credits do not check your income status. The minimum credit score required to obtain a loan from traditional lenders is 600, but even if you have the minimum required score, approval is not guaranteed, or you may only be offered a high interest rate.
Edmonton Auto Loans specializes in financing cars without credit. Even if you don't have credit, your application will be pre-approved within minutes of submitting your online application. No credit financing is available to anyone who has the income to qualify. You are pre-approved if you have a monthly income of $1,800 and have been at your job for more than 30 days. Even if you just started your job and don't have credit, your no credit financing can be approved the same day.
Mr. GOODLoans can help anyone get a loan, regardless of whether you have good, bad, or no credit. They don't require a credit or employment check; they just need you to own your vehicle outright. A no-credit-check loan is when a lender uses other information to determine a loan instead of the borrower's credit history. This information can be income, proof of employment, or banking information to approve a loan.
It's important to understand that alternative lenders typically charge higher interest rates than traditional banks because they take on more risk by working with borrowers without credit history. Always read the terms carefully and understand the total cost of the loan before signing any documents.
Credit unions as an alternative
Credit unions deserve special attention as an alternative for obtaining a loan without a credit history. These member-owned institutions are often more willing to approve borrowers with poor credit or no credit than traditional banks. Credit union loans for smaller amounts (up to $5,000) typically have more favorable interest rates and terms.
Credit unions and local banks often provide small loans for short periods of time. They typically have lower costs than payday loans. For example, some of Alberta's largest credit unions offer personal loans with competitive rates and flexible repayment terms. These institutions are community-focused and often provide more personalized service than payday loan companies.
The main requirement is credit union membership, and you will need to go through the loan agreement process before receiving the funds. This is not ideal if you need money immediately, but it is great for planning ahead. You usually need to become a member of the credit union, and then you can get the details of the loan based on your situation and the credit union's policies.
The advantages of credit unions include lower interest rates than bank loans, more flexibility with borrowers who have bad credit, and a focus on helping members rather than maximizing profits. The disadvantages include the need to be a member and the inability to access funds at the last minute.
Mobile phone plans and utilities
Signing up for a cell phone plan or internet service in your name and paying on time can help build your credit. Ask providers if they report payment history to credit bureaus.
A cell phone plan is often the first utility service that newcomers to Canada sign up for. Some providers do not require a credit check, but they report payment history to credit bureaus. Regular, timely payments help build your credit history. Set up automatic payments for your phone bill to avoid missed payments. This approach works well for other utility bills as well.
Step-by-step credit-building strategy
The most effective approach to building credit without a history in Edmonton is to use a combination of several strategies at once and move forward step by step.
Step 1: Open a bank account
Although not directly related to credit, opening a bank account should be the first step in starting your credit history. Many banks offer accounts for newcomers and packages to meet your everyday banking needs. When you open an account, the bank reports the details back to the credit bureau, which starts a new credit file for the individual, as it comes from a reputable financial institution.
Step 2: Get your first credit card
Apply for a secured credit card or a credit card for newcomers as soon as possible. The sooner you start using a credit card, the sooner you can start building your credit history in Canada. Your credit card can be your best tool for building credit—every monthly payment shows lenders that you are responsible. Keep your balance below 35% of your credit limit (for a $1,000 limit, stay below $350) and always pay on time — late payments hurt your rating.
Step 3: Sign up for a credit-building program or rent reporting
Along with using your credit card, sign up for a credit-building program like Borrowell Credit Builder or KOHO Credit Building, or start reporting your rent payments to Equifax. These services report your on-time payments to credit bureaus, and consistent rent payments show lenders that you can handle regular financial obligations.
Step 4: Always make your payments on time
Between looking for a job, finding a place to live, and settling into life in Canada, things can get chaotic. Unfortunately, this can increase the risk of forgetting things like your credit card payment date. Missing a payment, even accidentally, can lower your credit score. To avoid this, set up automatic payments through your bank account. You can choose to pay the full balance (ideal) or the minimum amount due each month. Your payment history, including late or missed payments, remains on your credit report for up to six years, so making timely payments is critical to maintaining a good credit score.
Step 5: Keep credit applications to a minimum
Every time you apply for a new credit product, the financial institution will run a credit check. Too many checks in a short period of time can signal to lenders that you are desperate for credit and may lower your credit score. Only apply for credit that you need, especially when you are establishing your financial foundation in Canada.
Step 6: Timing and consistency matter
Your credit history becomes stronger the longer you have accounts in good standing. Avoid closing your first credit card too quickly. A long-term account with consistent, on-time payments builds trust with lenders.
Getting credit without a credit history in Edmonton is entirely possible, although it requires a strategic approach and patience. Key strategies include using specialized programs for newcomers from major Canadian banks that do not require a Canadian credit history, obtaining a secured credit card as the most effective tool for building credit from scratch, enrolling in credit-building programs such as Borrowell Credit Builder or KOHO Credit Building, reporting rent payments to Equifax through services such as SingleKey or Borrowell Rent Advantage, considering student credit cards if you are enrolled in an educational institution, using a co-signer to qualify for traditional loans, exploring credit union options, which are often more flexible with new borrowers, and, as a last resort, turning to alternative lenders, although with caution regarding higher interest rates.
The most important aspect of building credit is consistency and responsibility. Always make payments on time, keep your credit utilization low (below 30-35% of your limit), don't apply for too many credit products at once, and be patient—building a solid credit history takes time, usually a minimum of six months to a year to see significant progress. With the right strategy and a disciplined approach, every Edmonton resident can successfully establish a credit history and gain access to the financial products they need to achieve their goals in Canada.