As Canadians continue to navigate evolving economic realities, a new TD survey shows that newcomers who arrived in Canada within the last five years face challenges when it comes to the country's credit system. Among new Canadians surveyed who have applied for credit, three in five (59 per cent) agree they would have a more positive living experience in Canada if they had better access to credit and 79 per cent say it is difficult for newcomers to start building a credit history.

Although these challenges are widely reported across the new Canadian community, it does not appear they are due to lack of understanding around the need for credit. According to the survey, 68 per cent of new Canadians say they were familiar with credit scores before arriving and 92 per cent believed it would be important to build a credit history here.

When asked what types of credit new Canadians have applied for, the top three were credit cards (92 per cent), car loans (18 per cent) and mortgages (13 per cent) according to consumers surveyed.

"For newcomers beginning their lives in Canada, getting off to a strong financial start can be incredibly challenging without access to the credit they need," said Muhammad Kara, Associate Vice President, New to Canada, Everyday Advice Journey, at TD. "We recognize just how critical it is for new Canadians to build a credit history as they establish themselves and set the foundation for their future here."

Credit challenges raise concerns
Despite their understanding of the importance of credit scores, new Canadians have identified significant barriers to entry around developing a strong credit history.

The survey found 80 per cent of new Canadians had applied for credit since arriving and, among them, 82 per cent surveyed faced challenges during the application process. These challenges included a limited knowledge of credit card rewards programs (35 per cent), a lack of knowledge of the Canadian financial system (31 per cent) and only being able to qualify for a lower credit limit/loan amount, which was not sufficient for their needs (31 per cent).

These barriers can cause stress and unease, with two-thirds (66 per cent) surveyed who have applied for credit expressing they are concerned about their Canadian credit history.

The impacts of a new credit reality
One-in-five (22 per cent) new Canadians surveyed who applied for credit do not feel they have enough access to it to maintain a comfortable lifestyle.

Because of a lack of access to credit, new Canadians surveyed have identified:

• Increased financial stress or anxiety (29 per cent)
• Limited ability to take out loans (28 per cent)
• Higher interest rates (27 per cent)
• Difficulty securing housing (27 per cent)
• Inability to save or invest for future goals (24 per cent)

"Our survey revealed just how impactful credit challenges can be for Canadian newcomers. With many new Canadians experiencing stress and anxiety, loan access restrictions, or difficulty achieving their unique financial goals, the need for tailored solutions is evident," added Kara. "TD is here to help new Canadians with the financial advice and tools they need, no matter where they are in their journey."

Credit education and solutions
When asked what would help them build or improve their credit history in Canada, one-in-three (34 per cent) newcomers surveyed pointed to better access to financial advisors who understand the unique needs of new Canadians.