Does Credit History Follow You Upon Relocation From The United States To Canada?

We recently received a very good question from a foreign exchange student who
is moving out of the country. He asked if the credit established in the U.S
follows a person, in this case to Canada. Here is what we found through our
research.

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SSN vs. SIN

In the United States, individuals are identified by their social security number
(SSN). There is no other person in the United States with an identical SSN. In
Canada, people have social insurance numbers (SIN), which serves the same
purpose. Credit bureaus in Canada use the SIN to keep track of 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 in the U.S
systems.

Credit Bureaus

In the United States, there are three major credit bureaus: Experian, TransUnion
and Equifax. These three bureaus provide credit reports and scores for all
individuals with a social security number who have opened a line of credit or a
loan. Canada's credit bureaus follow the same procedures.

In Canada, the three major credit bureaus are Equifax Canada, TransUnion Canada
and Northern Credit Bureaus, Inc.. In several scenarios, people have found that
the United States TransUnion and the Canada TransUnion share the same data in
their systems. In result, there may be a possibility of a Canadian financial
institution pulling your U.S credit history. This could be good for people with
positive credit and bad for those with not so good credit. Equifax may do the
same and share their data between countries. We have found that Experian has no
effect in foreign credit because it only conducts reports on U.S residents. The
same applies for Northern Credit Bureaus and its Canadian residents.

Credit Scores

As far as credit scores go, TransUnion Canada and Equifax Canada have both
implemented the FICO system from the United States. The only difference being is
credit scores in Canada range between a score of 300 and 900. Scores in the
United States use a scale of 300-850.

Scores closer to 900 are a lower risk for the lenders, which could mean a lower
interest rate to the borrower. The opposite can be said for scores closer to
300. These scores would be a much higher risk for the lender and in result would
mean a higher interest rate for the borrower.

If I do not have an SIN and am a American citizen, how do I apply for credit if
I move to Canada?

Just like in the U.S, in Canada it is hard to obtain credit without a credit
history. You can walk inside a Canadian bank and explain your situation to them.
Some banks in Canada will ask for some information from your U.S credit report.
This will enable them to make an easier and quicker decision to issue credit.
Some may offer you a secured credit card which will help you build a credit
history by depositing a certain amount on a pre-paid credit card and then make
payments.

Also, as stated above, TransUnion may have the ability to display U.S credit
report information to Canadian financial institutions because of shared data
between TransUnion Canada and the United States TransUnion.

What if I want to move to Canada for an extended period of time and then move
back to the United States?

If you are not planning on being a long term resident or are not planning on
buying a home, it may be best to stick with United States based international
credit cards. Credit card companies with affiliates in the U.S and Canada would
work best. These cards will work in both countries but will only report to the
U.S credit bureaus.

Here is an excerpt from the U.S Department of State: "If you will be abroad for
an extended period, you may want to arrange for the delivery of your mail. Some
banks and international credit card companies handle mail for customers at their
overseas branches. In addition, post offices in many countries will hold mail
for travelers under their General Delivery (Poste Restante) services. U.S.
Embassies and Consulates do not handle private mail. Check with the embassy of
your destination country to see if that will be possible there. A listing of
foreign embassies and consulates in the U.S. is available at http://www.state.gov/s/cpr/rls/dpl/32122.htm.
"

A safe bet is that if you owe on a debt in the U.S and move out of the country,
you will owe on that debt upon your return, as it will be recorded on your
credit report. Will creditors try to collect from you in another country? Well
that is the golden question. The golden response is, they may have a right to
collect. Will that new country consider your U.S credit history? It may.

Regardless of where you move, it is best to maintain a positive credit history.
If your new country of residence chooses to look at your U.S credit history you
want to make sure it is clear of negative information. However, one cannot
assume that a positive U.S credit history will help establish new credit in
another country.