You know the importance of having a strong credit history in Canada – a good credit score may help you buy a home, get a car loan, or qualify for a credit card with rewards. If you’re spending a lot of time in the U.S., however, a U.S. credit history may also open the same kinds of doors, and make it easier for you to live the lifestyle you want south of the border.
Paying less for insurance
Whether you’re looking to buy a home in the U.S. or are content to rent, you’ll want insurance to protect your belongings — the same goes for your car. With a good U.S. credit history, it may be easier to get the insurance you want, and you’ll likely pay less for your coverage.
Saving on your cell phone plan
Once you begin spending longer stretches in the U.S., you may decide your Canadian cell phone plan is a bit pricey. Many snowbirds, students and ex-pats therefore pick up a U.S. mobile plan for their time down south.
Cell phone providers often do a credit check during the application process, so having a credit history will certainly work in your favour. Good credit can help reduce or avoid security deposits, help save on monthly fees, and may give you access to more coverage plans.
Accessing U.S. cash
With the Canadian Loonie often below the U.S. Greenback, a U.S. personal loan or line of credit may be a great way to get access to U.S. cash. Providing a safety net to cover any unexpected costs and offering convenient access to U.S. funds, a U.S. loan or line means you avoid currency exchange, and lets you keep your Canadian dollars in Canada.
To qualify for a U.S. loan or line of credit, lenders will typically look for your U.S. credit history first — and the stronger that is, the better chance you have of getting approved, and/or securing a good rate. While some U.S. lenders will look at your Canadian credit history when qualifying you, a U.S. score may help provide a complete picture.
Renting U.S. property
If you’re looking into a long-term rental for your stay in the U.S., your potential landlord will be doing their due diligence on your background before handing over the keys. Part of their process will probably include a credit check so that they can feel comfortable you will be able to make the rent payments throughout the term of the lease.
Purchasing a U.S. home
If you’re ready to buy property in the U.S., qualifying for a mortgage becomes easier with a U.S. credit history. Like with a U.S. loan, there are lenders who will take your Canadian credit score into consideration when qualifying you for a mortgage. At the same time, a strong U.S. credit history may give the mortgage provider additional assurance of your ability to afford the home you’re purchasing — which can help make the mortgage application process smoother, and might make it easier to qualify for a lower interest rate.
How to build a U.S. credit history
One of the easiest ways to start building credit in the U.S. is to open a U.S. credit card, to use it regularly and make payments on the balance on time, every time.
The great thing about a U.S. credit card is that it eliminates currency conversion costs, and allows you to avoid foreign transaction fees, which can run up to $25 for every $1,000 spent on your card. So while you’re building good credit, you can save money at the same time. What’s more, many U.S. credit cards come with travel or cash back programs, rewarding you for spending regularly with your card.
While qualifying for credit isn’t typically all that simple for Canadians, some lenders, can help cross-border clients leverage their Canadian credit history to qualify for a U.S. credit card — or other U.S. lending product.
Keep in mind that in order to build your U.S. credit file, you will also need to have a valid Social Security Number (SSN). Accurate and complete reporting will ensure you can build a credit history right from the beginning. Getting your SSN isn’t complicated, and you can find all the info you need at the U.S. Social Security Administration.
For Canadians, building a U.S. credit history may open doors and simplify life. With a strong U.S. credit history, you’ll have more freedom to create the life you want, and can focus on enjoying your time in the U.S.
RBC Bank is RBC Bank (Georgia), National Association (“RBC Bank”), a wholly owned U.S. banking subsidiary of Royal Bank of Canada, and is a member of the U.S. Federal Deposit Insurance Corporation (“FDIC”). U.S. deposit accounts are insured by the FDIC up to the maximum amount permissible by law. U.S. banking products and services are offered and provided by RBC Bank. Canadian banking products and services are offered and provided by Royal Bank of Canada. U.S. deposit accounts are not insured by the Canada Deposit Insurance Corporation (“CDIC”).
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.