New to Canada Clients: How to Gain and Retain Business

New to Canada clients face the new experience of establishing new credit in Canada and with immigration comes credit opportunities for Canadian lenders. 

New to Canada clients create opportunities for lenders

On average, Canada welcomes 300,000 new immigrants per year, with Ontario and British Columia seeing the highest immigration rates among all provinces. Over the next two years, Canada is planning to welcome more than 1.3 million newcomers. 

This presents a big growth opportunity for lenders to acquire new clients as newcomers establish a credit history, apply for new products as their needs change and build financial worthiness throughout each life stage.

Why it’s important for lenders to be the first-in-wallet 

Becoming the first-in-wallet for New to Canada clients is key to establishing a relationship and building trust with clients as they apply for credit. It’s also a vital strategy for client retention. Higher credit limits or steady increases in credit limits on a first-in-wallet credit card may help retain clients over the long term. 

Often the hunger for a more stable financial future in a new country drives newcomers to make smarter credit decisions. While newcomers with thinner credit files generally are granted with lower limits, their spending accelerates at a faster rate than existing customers. 

3 reasons why New to Canada clients create growth opportunities

1. Credit score increases

Within 24 months, the average credit score for new immigrants increases by 19 points as they build more credit. 

2. Stable growth potential

Newcomers offer more stability and potential to grow as most newcomers are young and slowly build more credit over time. Spending for New to Canada clients also accelerates at a faster rate than existing consumers. 

3. Lower delinquency rates

New to Canada clients offer lower risk and lower credit card delinquencies for lenders when compared to some existing segments.

The New to Canada client credit journey

Establish a credit file and apply for a credit card

Approximately 60 per cent of newcomers get a credit card as their first product within the first six months of opening a credit file.

Purchase a car and apply for a car loan

After credit cards, auto loans are the next product many new immigrants apply for. Twenty per cent of newcomers get a car loan within one year of credit file creation and 20 per cent also apply for the car loan with their first credit card lender. 

Buy a home and apply for a mortgage 

Approximately nine per cent of New to Canada consumers end up getting a mortgage in the first 12 months of creating a credit file. Thirty per cent of these clients get a mortgage with their first credit card lender. 

Your credit cards strategy is an important part of client retention 

New to Canada clients are a viable target market for lenders as their score history consistently improves and their need for new credit products develops over time. It’s necessary for lenders to become first-in-wallet to remain competitive in this consumer sector. 

We want to help you and your New to Canada clients live your financial best. Equifax offers unique data and insights solutions to help increase your share of wallet. From regulatory compliance to maximizing customer relationships, we deliver trusted data-driven solutions tailored for your needs.

If you would like to learn more about how Equifax can help you make better financial decisions and minimize risk, let’s talk. Please contact your Equifax Account Representative or call us at 1-855-233-9226. We want to be a partner who helps you retain and grow your credit business with New to Canada customers for many years to come. 

 

Source for all data and statistics is Equifax Canada.

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