Back to learn

Can I open a Bank Account in Canada with Bad or No Credit?

4 min read

Can I open a Bank Account in Canada with Bad or No Credit?

Written By

Meghana Agashe
Meghana Agashe

Reviewed By

Clay Shiffman

The idea of opening a bank account with no credit history might seem daunting—it almost feels like someone has asked you to appear for a test without giving you any study materials. But don’t worry, we’ve got you covered.

Whether you're a student, a newcomer in Canada, or just someone who hasn't had the chance to build credit yet, this blog post is your passport to banking success. In this article, we will explore the requirements for opening a bank account in Canada and discuss the options available for individuals with bad or no credit.

Is a credit score necessary to open a bank account in Canada?

The short answer is, it depends: While credit scores are often considered by banks, they are not the sole determining factor. If you don’t have a credit score or are yet to build your credit history, you can still open a bank account by exploring banks with basic or no-credit-check accounts and considering alternative financial services.

However, before diving into each of these alternatives, it’s important to first have a basic understanding of how the banking system in Canada works, and how your credit standing can affect your ability to access financial services.

How the banking system in Canada works

The banking system in Canada is composed of various financial institutions that provide a wide range of banking services to individuals, businesses, and other organizations. It comprises of:

Traditional or Major Banks: Canada has several major banks, commonly known as the "Big Five." These banks include the Royal Bank of Canada (RBC), Toronto-Dominion Bank (TD Bank), Bank of Montreal (BMO), Canadian Imperial Bank of Commerce (CIBC), and Scotiabank. These banks have a significant presence across the country and offer a comprehensive range of banking products and services.

Credit Unions: Credit unions are member-owned financial cooperatives that operate in various regions of Canada. They serve local communities and often offer competitive rates and personalized services. Credit unions are regulated at the provincial level and provide similar services to banks, including savings accounts, loans, mortgages, and other financial products.

Online Banks: Online banks, also known as virtual banks or digital banks, have gained popularity in recent years. These banks operate entirely online, without brick-and-mortar branches. They offer convenient digital banking services and typically provide competitive interest rates and lower fees compared to traditional banks.

Alternative Financial Institutions: In addition to traditional banks and credit unions, Canada has alternative financial institutions that cater to specific needs or underserved populations. These institutions may focus on micro-lending, community development, or providing banking services to individuals with no credit history or bad credit.

What do banks look for when opening a bank account?

The good news is that banks don't care too much about your credit score or lack of credit history when you’re opening a checking or savings account. Instead, they may screen your banking history to ensure you have a responsible banking record. But if you’re applying for additional services such as overdraft protection, they may do a hard check on your credit report.

As a resident of Canada, you have the right to open a bank account regardless of your credit status, even if you've gone through bankruptcy or are currently unemployed. So, rest assured that your credit score won't hold you back from accessing essential banking services.

For non-residents who are living, working, or studying in Canada for an extended period, knowing how to open a bank account in Canada is beneficial. In most cases, non-residents who are legally employed or attending school in Canada will have all the necessary paperwork to open an account. Some banks even provide specialized assistance tailored to newcomers.

What documents are needed to open a bank account in Canada

To open a bank account in Canada, it's important to provide proper identification to confirm your identity. We understand that knowing what documents are required can sometimes be confusing, so let's break it down.

According to the Government of Canada’s website, there are two ways to meet the identification (ID) requirements, and you'll need to provide original IDs, not photocopies. Here's what you can do:

Option 1: Provide two documents from a reliable source:

  • One document showing your name and address.

  • Another document showing your name and date of birth.

It’s important to note that these two identification documents must be from the following list:

  • Identification issued by the Government of Canada or a provincial government such as your driver’s license.

  • Recent notices of tax assessments issued by the Government of Canada or a provincial or municipal government.

  • Recent statements of benefits from the Government of Canada or a provincial government.

  • Recent Canadian public utility bills.

  • Recent bank account or credit card statements.

  • Foreign passports.

Option 2: Provide any document from a reliable source indicating your name and date of birth. However, this option only works if your identity is also confirmed by either:

  • A customer who is in good standing with the bank

  • Someone who is of good standing in the community where you are opening the account.

By providing the required identification documents, you'll be on your way to opening a bank account with ease.

If you have any further questions or need clarification, don't hesitate to reach out to your chosen bank. They will be more than happy to guide you through the process and ensure you have everything you need to open your bank account successfully.

What are the alternatives to traditional bank accounts?

If you’re trying to open a bank account in Canada without any credit history or with bad credit, you can do so by choosing from one of the following options:

Banks that don’t need credit check to open an account in Canada

While traditional banks in Canada typically perform credit checks when opening an account, there are a few options that may be more flexible for newcomers or individuals with credit challenges. Almost all traditional banks that offer a checking account, savings account, and other services to newcomers on work permit or permanent residents and students without requiring a credit check.

It's worth noting that even though these accounts may not require a credit check, they may have certain limitations or fees associated with them. It's essential to review the specific terms and conditions of each account and consider how well they align with your banking needs and preferences.

Credit unions as an alternative to traditional banks

Credit unions are known for their flexibility and may have less stringent requirements compared to traditional banks. They often prioritize personalized service and can be a great option for individuals with no credit history or bad credit. Research local credit unions in your area to find one that suits your banking needs.

Prepaid cards for people with bad or no credit

Another alternative to traditional bank accounts is prepaid cards. These cards can be obtained without a credit check and function like a debit card. You load funds onto the card, and you can use it for purchases and online transactions. While prepaid cards may have certain limitations compared to full-fledged bank accounts, they are a great option for individuals with bad or no credit.

One such prepaid card option to explore is KOHO. KOHO’s credit building service offers you a spending and savings account with a prepaid Mastercard. Services include prepaid cards, budgeting tools, and cashback rewards. It can be a suitable choice for individuals looking for a digital banking experience with no credit checks involved.

How to choose the right alternative banking account for you

Choosing the best alternative banking option for you involves considering your needs and preferences. Here are some factors to keep in mind when making your decision:

  • Services Offered: Evaluate the range of services provided by the alternative banking option. Consider your specific banking needs, such as checking and savings accounts, access to ATMs, online and mobile banking, bill payments, and money transfers. Ensure that the alternative option offers services that are essential for your financial management.

  • Fees and Costs: Compare the fees associated with the alternative banking option. Look for any monthly account fees, transaction fees, ATM withdrawal fees, or other charges. Assess whether the fees align with the value you receive from the services offered. Some alternatives may have lower or more transparent fee structures compared to traditional banks.

  • Accessibility and Convenience: Consider the convenience and accessibility of the alternative banking option. Look for features like a user-friendly mobile app, 24/7 customer support, a wide network of ATMs, and digital tools that make banking easier. Assess whether the alternative option provides the level of accessibility and convenience that fits your lifestyle.

  • Reputation and Trustworthiness: Research the reputation and reliability of the alternative banking option. Read customer reviews, check for any regulatory certifications or licenses, and assess the financial institution's track record. Look for an option that is well-established, trustworthy, and known for providing excellent customer service.

  • Specialized Features: Some alternative banking options may offer unique features or benefits. For example, certain online banks or fintech companies like Koho provide budgeting tools, cashback rewards, or other perks. Assess whether these specialized features align with your financial goals and preferences.

  • Community Support: In the case of credit unions or community-focused alternatives, consider the value of community support and personalized service. Credit unions often prioritize serving their members and may offer additional benefits such as lower fees, competitive interest rates, or educational resources.

  • Research and Compare: Take the time to research and compare different alternative banking options. Visit their websites, review their product details and terms, and compare the pros and cons. Pay attention to the specific requirements for opening an account, eligibility criteria, and any limitations that may affect your banking experience.


In conclusion, having bad or no credit doesn't have to stand in your way of opening a bank account in Canada. There are several friendly banks that offer basic or no-credit-check accounts, and you can also explore alternative financial services. Remember, it's important to take the time to research and compare different banks and account options to find the right fit for you. By doing so, you'll be able to access the essential banking services you need and improve your overall financial well-being.

Note: KOHO product information and/or features may have been updated since this blog post was published. Please refer to our KOHO Plans page for our most up to date account information!

Meghana Agashe

Meghana is a content strategist with experience writing for companies in the technology sector. Originally from India, Meghana has been living in Canada since 2019, where she continues to explore her passion for content marketing.



AboutAffiliatesCareersCommunity DiscountsCultureEnterpriseLearnNewcomersTravelStatusStudent & Graduate Discounts


The KOHO Mastercard® Prepaid card is issued by KOHO Financial Inc. pursuant to license by Mastercard International Incorporated. Mastercard and the circles design are registered trademarks of Mastercard International Incorporated.

By using this website, you accept our Terms and Conditions. Follow these links for more information on our Privacy Policy and Accessibility Policy. © 2024 KOHO Financial Inc.