When Rebecca Oakes emigrated from the UK to Canada in 2017, she never anticipated that one of the first challenges she’d face would be securing a quality Canadian credit card.
Vice President of Data & Analytics, Equifax
The trouble stemmed from her lack of a recognized credit history in Canada, a challenge she had to tackle with a sense of irony, considering she was arriving as a vice president with Equifax Canada –one of the world’s leading credit reporting agencies.
”Despite working for Equifax, that didn’t help me get a credit file” she recalls with a laugh.
Oakes, of course, had the tools to navigate the dilemma, but her situation is a common one faced by thousands of newcomers each year who arrive in Canada with limited credit histories.
For those seeking access to essential financial services, such as mortgages to help them lay down roots, the lack of a credit history can lead to added stress, unexpected expenses, and uncertainty.
Equifax’s Global Consumer Credit File: A game changer for newcomers
It’s a key reason why Equifax recently introduced its new Global Consumer Credit File. The initiative allows newcomers to Canada to extend their new Canadian credit files back to their countries of origin, creating a corroborated snapshot of their financial history prior to arrival.
“One of the big beliefs that Equifax stands for is that we strive to create economically healthy individuals and financially inclusive communities,” says Oakes, Vice President of Data & Analytics at the agency. “When you look at Canada in particular, there are many newcomers arriving in Canada each year, and often they are arriving with credit histories in their home countries that go unseen by Canadian financial institutions.”
Previously, many newcomers were forced to rebuild their credit histories from scratch before gaining full access to essential services like starting a business, securing student loans, or purchasing their first home in Canada. Under the current system, this process can take time, potentially delaying their plans and hindering their ability to fully contribute to Canada’s economy for years.
The product’s arrival is timely. According to Immigration, Refugees and Citizenship Canada, Canada is expected to welcome 500,000 new immigrants annually by 2025. While recent political unease and shifting policies may temper these figures, Canada is likely to remain one of the top destinations for migrants globally for the foreseeable future.
Addressing the needs of lenders and consumers alike
A significant portion of these newcomers are from India, which, as of 2021, was the country of origin for nearly 1 in 5 immigrants to Canada. India will be the first country where the Global Consumer Credit File is activated. Subsequent phases will expand to South America, with Brazil, Argentina, and Chile being the next targets. Overall, the program is set to roll out in 18 countries over the coming months, focusing on regions where Equifax already has a global presence.
While this is great news for newcomers planning their financial futures in Canada, the product also aims to address the needs of lenders.
“We are constantly talking to lenders and financial providers, it’s part of what we do day-to-day, just to understand what their needs are,” said Oakes. She added that lenders have long recognized the growing population of newcomers to Canada but have struggled with limited information to support them.
“They know that they don’t have much information to help immigrants when they first arrive to Canada, and therefore that has limited the products that are offered,” she noted.
How it works
Each global affiliate collaborating with Equifax Canada to consolidate information is a foreign Equifax entity. When individuals request the expanded report, these entities will be contacted to coordinate and share information with Equifax Canada.
The process is designed with thorough verification and security to ensure reliability. Additionally, Equifax has worked to understand and translate the complexities of its global partners’ credit systems and scoring criteria, ensuring their relevance in the Canadian market.
As a result, rather than simply sharing an individual’s foreign credit score, the program will generate a more accurate, calibrated Canadian score, offering more comprehensive information to potential lenders.
“We’re hoping this is going to be a win-win for everybody here, the lenders get more information, and the consumers can get better access to credit and finances,” adds Oakes.
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Last modified: December 2, 2024
