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Credit & Debt


Most people have to use credit at some point either to make a purchase or manage their finances. The term credit refers to borrowing money and paying it back at a later date. For example, people often use credit to buy a car or house because large sums of money are involved. Some people use also credit to make smaller purchases such as groceries or gasoline. Student loans for education and training are another form of credit.

Different types of credit are available in Canada: credit cards, lines of credit, loans and mortgages. Every form of credit is governed by different rules and regulations but all credit is a type of loan and the borrower is usually charged interest on the money.

Obtaining credit in Canada for the first time is difficult. Most Canadian banks will not provide credit to individuals with no Canadian credit or financial history, even if the person has a good credit history in another country or with an international financial institution. Some suggestions on how to overcome this problem are provided in the For More Information links below.

Once you do obtain credit, it's important to make credit payments on time and not to borrow more than you can repay. This will help you to quickly establish and maintain a good credit history in Canada. A Canadian credit history is usually needed to qualify for a loan or mortgage although some financial institutions will recognize your previous financial history.


When people consistently spend too much or borrow more than they can afford to repay, they end up in debt. Owing money can be very stressful on individuals and families.

Some of the warning signs of debt include:

  • Borrowing money to cover your expenses between paycheques
  • Using credit cards to pay for most or all of your purchases
  • Only paying interest or service charges on an outstanding debt without paying any of the principal
  • Having your utilities stopped because of unpaid bills

People who have trouble managing their money can get help from a credit counselling service. These are private or non-profit organizations with trained counsellors who teach people to reduce their debts through better budgeting. Sometimes a credit counselling service will help you simply your debts by combining them into one loan that is easier to manage.

For More Information

Protecting your money
A guide to banks and other financial institutions, opening an account, using banking machines, direct deposit, sending money, applying for credit, telemarketing and other information.

Money, Credit & Debt
Information, solutions and tools to help individuals manage their debt. Includes tips on how to recognize the warning signs of debt.

Managing Your Debt
A list of links to information and sites for people who need help managing their money and debt.

Credit – Handle With Care
Shopping for credit, credit ratings, getting a credit card and managing credit. An introduction to the loan industry and borrowing.

Dealing with Debt: A Consumer’s Guide
How to recognize the signs of debt, where to go for help, assessment and counselling, declaring bankruptcy and possible solutions.

How can I get a credit card with no Canadian credit history?
How to get a credit card if Canadian banks refuse to recognize your previous credit history. Available in Arabic, Chinese (Simplified), French, Gujarati, Pilipino (Tagalog), Punjabi, Russian, Spanish, Tamil, and Urdu.

Phone Line for Legal Information and Referrals — In Many Languages (Settlement.Org)
Newcomers who need legal information or referrals can call a free toll-free telephone number 24 hours a day, seven days a week, and receive service in English, French, Arabic, Chinese (Mandarin), Somali, Spanish, Tamil and Urdu.

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