Samantha, a new immigrant in Montreal, Quebec, who has been in Canada for 18 months, is seeking to purchase her first home. She has some international credit history but limited Canadian credit. Her only Canadian trade line is a secured credit card with a $500 limit, in good standing for 10 months. What challenge is Samantha most likely to face regarding her credit for a mortgage application?

Question: Samantha, a new immigrant in Montreal, Quebec, who has been in Canada for 18 months, is seeking to purchase her first home. She has some international credit history but limited Canadian credit. Her only Canadian trade line is a secured credit card with a $500 limit, in good standing for 10 months. What challenge is Samantha most likely to face regarding her credit for a mortgage application?

Answer options: ✅ She will likely be declined by most prime lenders due to insufficient Canadian credit history and an inadequate number of active trade lines to generate a beacon score.

• Her international credit history will automatically be transferred and provide sufficient basis for a Canadian mortgage approval.
• Lenders will use her secured credit card as the sole basis for assessing her creditworthiness, regardless of its limit.
• She will only qualify for a mortgage through a private lender due to her new immigrant status.

Correct answer: She will likely be declined by most prime lenders due to insufficient Canadian credit history and an inadequate number of active trade lines to generate a beacon score.

Explanation: Most prime lenders require a minimum of two to three active Canadian trade lines in good standing for at least two years to establish a sufficient credit history and generate a reliable credit score, as per their underwriting policies.