Why Credit Monitoring is Important for Newcomers to Canada

Thanks to a range of new providers, credit monitoring is easier than ever, free, and, dare we say it, fun. In this article, we’ll walk you through how and why credit monitoring can be a gamechanger for newcomers looking to improve their financial future in Canada and what to look out for in a credit monitoring tool.  

Key Takeaways 

• Credit monitoring tools are free and do not hurt your credit score.  

• Credit monitoring can help you build your credit score, pay down debt, and reduce your risk of identity theft.  

• It’s important to only use trusted tools to manage and build your credit. There are plenty of scam providers out there.  

What is Credit Monitoring?  

Credit monitoring is a broad term for any service that provides regular updates about your credit score and report. While this might not sound too exciting on its face, credit monitoring is actually pretty powerful. That’s why TransUnion describe credit monitoring as a service that “acts as both a personal assistant and a watchdog when it comes to your credit.” That’s a tool you want in your back pocket – a personal assistant and a protector in one!  

The Benefits of Credit Monitoring 

A recent TransUnion Consumer Pulse survey revealed that 88% of Canadian consumers believe monitoring their credit is important, with nearly three-quarters (72%) actively doing so.  

Why? Because keeping track of your credit report can help you: 

1. Protect Against Fraud: Identity theft and credit card fraud are risks everyone faces, but newcomers can be particularly vulnerable as they navigate a new financial system. By monitoring your credit report, you can quickly spot and address any unauthorized activity. 
2. Build a Strong Credit History: Many newcomers start with little to no Canadian credit history. Regularly checking your credit can help you track your progress as you establish good credit habits and learn about the credit system along the way.  
3. Ensure Accuracy: Errors in your credit report can lower your credit score and impact your ability to access credit. Monitoring allows you to identify mistakes and take steps to correct them. 

Newcomers And Credit Monitoring in Canada 

The survey found that 38% of Canadians monitor their credit at least monthly, and tools to do so are widely available. Many banks and financial institutions offer free credit monitoring services as part of their accounts, and there are a host of credit monitoring tools available (also for free). For newcomers, this can be a convenient way to stay informed without additional costs. 

According to the survey, the top reasons for credit monitoring are: 

• It’s free (44%) 

• Protecting against fraud (42%) 

• Ensuring reports are accurate (41%).  

Another report also noted that credit monitoring can help to pay down and better manage credit card balances. It goes on to note that those who are new-to-credit (like many newcomers to Canada are) find credit monitoring particularly beneficial.  

What to Look for in a Credit Monitoring Tool 

When choosing a credit monitoring service, newcomers should consider: 

• Ease of Use: Does the service offer an app or online platform that’s easy to understand and easy to navigate? 

• Alerts and Notifications: Does it notify you of significant changes to your credit report? What about prompts to log in and check your credit at regular intervals? Building new habits can be hard, so these prompts are really helpful.  

• Affordability: Many trustworthy services are free, which is ideal for newcomers who may be managing tight budgets. In fact, it’s important to be careful if a company promises to help you build your credit for a fee. There are trustworthy products that cost money to build credit, but there are also a lot of bad actors. Be sure to check reviews and only use providers recommended by trusted sources.  

Helpful Tools We Recommend 

As we mentioned, there are a range of trustworthy credit monitoring tools available in Canada. These are some tools we recommend: 

Borrowell 

The Borrowell platform provides a straightforward way to manage your financial health. Sign up for a free credit score calculator in under three minutes, and you can access your credit score and Equifax credit report for free. No credit card needed. 

Check your score anytime without affecting it, and benefit from weekly updates to stay informed. In other words, Borrowell offers an effective way for you to improve your financial health and stay in control of your credit journey. 

Borrowell also offers a range of trustworthy paid products to help you strengthen your credit history:  

• Credit Builder with guaranteed approval, low costs, no hidden fees, that helps you build your credit with a positive payment history and; 

• Rent Advantage, which reports your rent to Equifax to help build your credit history.  

Check Your Credit Score Through Your Bank 

Many financial institutions in Canada offer credit score tools through your bank account. These tools don’t tend to be as comprehensive as the purpose-built tools, like Borrowell, but they can help you maintain control of your overall financial health.  

Learn more about this from Scotiabank. 

Final Thoughts 

It’s really wise to take advantage of free credit monitoring tools offered by banks and credit monitoring tools so you can stay proactive in managing your credit. This sets you up to better equipped to handle Canada’s financial system with confidence – and to have better financial outcomes in the long term.