How Newcomers Can Build Credit with Rent-to-Own in Canada

Building credit is one of the most important early financial steps for newcomers settling in Canada. But for many immigrants and recent arrivals, the traditional credit system can feel confusing, inaccessible, or slow to work with. Lenders often expect Canadian credit history and proof of stable credit behaviour, yet most financial products require existing credit to access.

This presents a challenge: how do you build credit without having it first?

One practical, often overlooked option is entering into a rent-to-own agreement for a home. While not every rent-to-own arrangement helps your credit score, some contracts are specifically structured to support credit growth through consistent payments, saving discipline, and formal credit reporting. These agreements can also help you move toward home ownership faster, especially if you're not yet ready to qualify for a conventional mortgage.

Requity Homes, a top Canadian rent-to-own company, offers a newcomer-friendly program designed for those who are mortgage-ready in the near future, but face current barriers. This article explains how rent-to-own contracts can support credit building, what newcomers need to watch for, and where Requity Homes fits into the broader home-buying process.

What credit score do new Canadians start with?

New Canadians do not have a credit score when they first arrive. Credit history from another country, even if excellent, does not transfer to Canadian credit bureaus like Equifax or TransUnion. A Canadian credit score is only created once you open a credit account, such as a secured credit card, and make regular payments that are reported to a bureau.

In most cases, a credit score appears within three to six months of using your first credit product, usually starting in the lower range (around 300–400). From there, consistent on-time payments and responsible use of credit products help you improve your credit and build a stronger score over time.

Why newcomers to Canada need to build credit early

A strong credit score opens access to financial tools and services you will rely on: applying for a home loan, financing a car, renting an apartment, or getting a phone plan. Even some real estate landlords or employers check your credit history.

Many newcomers wonder, can immigrants buy a house in Canada if they do not yet have established credit. The answer is yes, but most lenders require a Canadian credit history to approve a mortgage. Without it, you may face higher down payment requirements, stricter income verification, or the need for a co-signer. This makes early credit building essential for homeownership goals.

Newcomers face additional barriers, such as:

• No active Canadian tradelines (credit accounts)
• Limited job history or income documentation
• Lack of access to co-signers
• Fear of debt or unfamiliarity with credit-building tools

Without any credit history, lenders often treat you the same as someone with bad credit, which can limit your options or lead to higher interest rates. That's why starting early with low-risk products, like secured cards or rent-to-own housing, is essential.

Read more about can you buy a home with no credit score

How rent-to-own works in Canada for new immigrants

A rent-to-own home is part of a lease-option agreement where you rent a property with the right to buy it later, usually at a pre-agreed purchase price. These agreements can last from two to five years, depending on the provider and your financial situation.

Here's how a typical rent-to-own contract works:

1. You sign a lease agreement and a separate option-to-purchase contract.
2. You make monthly rent payments, a portion of which may go toward your future down payment (Rent Credits).
3. You may also pay an option fee, usually 2 to 5 percent of the home price, which gives you the right to buy the property later.
4. At the end of the lease period, you can purchase the home at the agreed price, regardless of changes in market conditions.

The real estate market in Canada can be competitive, and rent-to-own gives newcomers time to save and improve their credit while locking in a path to home ownership. It also provides stability during the transition from renting to buying, without relying on private lenders or payday loans, which often come with high fees and poor terms.

Read more about how rent-to-own works

Can rent-to-own housing help newcomers build credit?

Yes, but it depends on how the agreement is structured. Rent-to-own can support credit building if:

• The provider or a credit reporting platform reports your payments to Equifax or TransUnion.
• You consistently make on-time payments that demonstrate responsible financial behaviour.
• You avoid missed payments, which could lead to collections or breach of contract.

Rent-to-own may not build credit as quickly as using a credit card, but it can help establish positive payment history while you work toward homeownership. Pairing rent-to-own with safe credit-building tools, such as secured credit cards, newcomer banking programs, or credit counselling, can further improve your credit over time.

Read more about does rent-to-own build credit

How newcomers can find rent-to-own providers that report to credit bureaus

To use rent-to-own as a credit-building tool, choose your provider carefully. Look for:

• Programs that clearly disclose rent payment reporting policies
• Transparency about monthly costs, option fees, and lease terms
• Flexibility in home choice, ideally through a real estate agent
• Support with mortgage qualification and preparation for conventional loans

Be cautious of rent-to-own companies that don’t offer a clear path to ownership, or that have vague contracts. A reliable provider should also allow time for a home inspection, explain local property taxes, and connect you with a real estate lawyer to review your agreement.

How Requity Homes’ rent-to-own program helps newcomers build credit in Canada

Requity Homes offers a structured rent-to-own program tailored for Canadians with limited credit history or non-traditional financial backgrounds. This includes newcomers who are financially stable but not quite mortgage-ready. 

Requity Homes also provides credit reporting options and access to credit coaching support to help participants build stronger financial foundations while working toward homeownership.

How the rent-to-own home process works for newcomers to Canada:

1. Apply to pre-qualify: Use our rent-to-own affordability calculator and check eligibility with no impact on your credit report or credit inquiries. 
2. Get full approval: Submit income documents to determine your approved home-buying budget.
3. Find your dream home: Choose from eligible rent-to-own properties in Canada based on your budget and location.
4. Requity buys the home: We cover closing costs like legal fees, land transfer tax, and inspections.
5. Move in and save: Rent while contributing to your down payment over time.
6. Buy the home: Once you're mortgage-ready, purchase it at the agreed purchase price.

Rent-to-own qualification criteria:

• Minimum $5,000 down payment
• Minimum $70,000 household income
• Minimum 500 credit score
• No active consumer proposal, bankruptcy, or unpaid collections
• Maximum 50 percent debt-to-income ratio

Read more about the benefits of rent-to-own for newcomers

Other ways newcomers to Canada can build credit in Canada

Rent-to-own housing is just one part of a larger credit-building strategy. Here are other proven methods:

• Secured credit cards: Ideal for those without any credit history.
• Authorized user status: Get added to a family member’s account to inherit positive history.
• Utility and phone bill reporting: Some services report payments to credit bureaus.
• Newcomer banking programs: Many banks offer starter products for immigrants, such as credit cards and car loans.
• Down payment assistance programs: These may free up cash so you can invest in other credit-building tools.
• Monitor your credit utilization ratio: Keep balances below 30 percent of your total available credit.

Used together, these tools can support long-term financial health and make it easier to qualify for a home loan, even if you're starting from zero.

Smart credit tips for newcomers using rent-to-own

• Confirm rent reporting with your provider or ask about using a credit reporting platform.
• Pay rent and all bills on time to avoid collections agency actions.
• Monitor your credit regularly to catch issues early.
• Pair rent-to-own with credit cards or banking tools designed for newcomers.
• Avoid high-interest products like title loans, payday loans, or subprime lenders unless absolutely necessary.

How rent-to-own can help newcomers build credit

For newcomers to Canada, building credit is essential, but not always easy. Rent-to-own homes provide a structured way to improve your credit, grow your savings, and prepare for future mortgage qualification. Programs like Requity Homes are built with flexibility, education, and long-term success in mind, especially for people who are new to the Canadian real estate market.

By combining rent-to-own with secured credit, low credit utilization, and rent-reporting tools, you can move confidently toward your financial goals. Whether you’re working toward home ownership or just need a solid start, the right support and structure can help you build credit and financial stability faster in Canada.

Ready to get started? Build credit and pre-qualify for rent-to-own with Requity Homes

Frequently asked questions (FAQs) about building credit for new immigrants to Canada

Can newcomers build credit with rent-to-own housing?

Yes, if the housing provider or a third-party service reports rent payments. It can also help demonstrate financial discipline and prepare you for a mortgage.

How long does it take to build credit as a newcomer to Canada?

If you open a secured credit card or reported account, you may see your first score in three to six months. Building a strong score can take 12 months or more of consistent payment history.

Does rent-to-own furniture or electronics help newcomers build credit?

Not usually. Most retail rent-to-own stores do not report payments to credit bureaus. Missing payments, however, could hurt your credit if sent to collections.

Is rent-to-own better than a secured credit card for building credit?

Secured credit cards are a faster and more direct way to build credit. However, rent-to-own housing, especially from a provider like Requity Homes, can help build credit and savings at the same time, making it a strong complementary option.

How long does it take to get a 600 credit score from 0?

It typically takes three to six months for newcomers to generate their first Canadian credit score after opening a credit product like a secured credit card or loan. Reaching a score of around 600, which is considered fair, usually takes six to twelve months of consistent on-time payments, low credit utilization (keeping balances under 30 percent of your limit), and responsible use of credit products.

How to build credit score as a new immigrant?

New immigrants can build a credit score by opening a secured credit card, making timely payments, keeping balances low, and using rent or bill-reporting tools to add non-traditional payments to their credit file. Monitoring your credit regularly and taking advantage of newcomer banking programs from major Canadian banks can also speed up the process.

What is considered a poor credit score in Canada?

In Canada, credit scores range from 300 to 900, and any score below 560 is considered poor. A poor score can make it harder to qualify for loans, credit cards, or housing without extra conditions such as higher interest rates, larger deposits, or a co-signer.

Is it bad to have no credit score?

Having no credit score is not inherently bad, but it does limit your financial options in Canada because lenders and landlords have no record of your creditworthiness. This often leads to denied applications, higher interest rates, or larger security deposits until you establish a credit history through products like secured credit cards or rent-reporting services.

Does Immigration Canada check credit history?

Immigration, Refugees and Citizenship Canada (IRCC) does not check your credit history when assessing immigration applications, so your credit score does not affect your eligibility for permanent residency, study permits, work permits, or citizenship. However, once in Canada, a credit history becomes important for renting housing, getting loans, or applying for a mortgage, so it is still wise to start building credit as soon as possible.

Do immigrants get a credit score?

Immigrants do not arrive in Canada with a credit score. Your credit history from another country does not transfer to the Canadian credit system. A credit score is only created after you open a credit account in Canada, such as a secured credit card, car loan, or another product that reports to a credit bureau like Equifax or TransUnion.