Canada Credit Report

Your question raises two issues: Canada credit report and its relationship to your US credit report, and a US creditor collecting a debt from a Canadian resident. This answer does not explore the unspoken issue regarding the legality of your residing in Canada.

Will a US credit history follow a consumer into Canada?

The main credit reporting agencies in Canada are Equifax Canada and TransUnion Canada. These are the Canadian equivalents and subsidiaries or sister companies to the US companies. The Canadian credit score and history is based on Canadian financial records. The Canadian reporting agencies will accept information from foreign agencies when asked for and provided by the individual. There is no indication the two Canadian credit reporting agencies confer with each other.

It is unclear if the credit reporting agencies share information across the US-Canada border routinely. As mentioned, your US credit history will not follow you unless you cite your US credit cards. If you do not, then your Canadian credit score starts at zero. You will need to provide the Canadian credit card company your address and former addresses when applying for a new credit card.

It is theoretically possible for a US credit reporting agency operating in Canada to correlate these two addresses. It is also possible for a creditor to correlate your US and Canadian identity if you apply for credit card with a bank that does business in the US. In Canada, you must provide a Social Insurance Number (SIN), which is functionally similar to a US Social Security Number (SSN) when opening a bank or credit account, but the numbers are unrelated and there is no known database that correlates the identities of people in both databases.

Because the SIN and SSN are unique to you, and both are used in credit score reporting, it is theoretically possible for a US credit reporting agency to determine your address in Canada. However, as I mentioned, there is no known database or mechanism in place today to allow this functionality on a wide scale.

Will a US credit report affect a Canada credit report?

For the reasons mentioned above, it is unlikely a person with a US credit history who relocates in Canada will have their credit history appear on their Canada credit report. The opposite is also true. Canada credit reports are similar to their US counterparts in the information contained. See the Canada’s Office of Consumer Affairs document Credit report, credit score and credit rating.

Domesticating a US judgment in Canada

In the US, the judgments in one US state receive the full faith and credit of sister states. Before a judgment is enforced in a sister state, the judgment must be domesticated. This process is fairly automatic, though comes at a cost to the judgment-creditor.

There is no law that requires a Canadian court to enforce a United States civil judgment automatically. However, the US and Canada are long-time trading partners with treaties that create close economic ties between the countries. The debtor may attempt to domesticate a judgment in a provincial court.

As a practical matter, if a US resident enters into a credit card contract with a US bank, incurs (for the sake of argument) $1 million in debt, and then changes residences to Canada without repaying the debt, that creditor has the legal means to domesticate a US judgment in Canada. On the other hand, if a US resident incurs $100 in credit card debt and flees to Canada, it is unlikely that the US bank would go to the time and expense of finding the deadbeat and domesticating a judgment in a Canadian court.

The US credit score would be affected in either hypothetical situation. If the deadbeat returns to the US, he or she will face a grim credit score. Plus, the creditors will to locate the current address of the deadbeat because of the SSN.

Recommendation

There is a slight risk to your Canadian credit report if you leave your US credit report in shambles. You do not indicate if the debt is with many creditors or a few. If the debt is sufficiently large with one creditor, a financially motivated US creditor has the option to domesticate a judgment it obtains in the US in Canada. Therefore, it would be best if you could negotiate a reduction in the debt and pay what you can before changing your residence. See What are my debt resolution options? to see the pros and cons of the plans available.

You are responsible for the debt in the US regardless of where you live, so it is best to resolve these debts, even if you pay the debt while residing in Canada. If you move to Canada, develop a plan to resolve your US debt.

Your question does not involve bankruptcy, but for the benefit of other readers, see the Bills.com resource Canada Bankruptcy to learn more about the requirements for filing bankruptcy in Canada. I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com