Understanding Your Credit Report

credit reportUnderstanding my Credit Report

What is a Credit Report?

Your credit report and credit score are two different things. Your credit score is a three-digit number that comes from the information in your credit report, and your credit report is a detailed summary of your credit history prepared by a credit bureau. It’s like a snapshot of your entire financial history. A credit bureau is an agency that collects and researches people’s credit information and sells it to creditors so they can decide on granting loans to individuals. They collect information based on your credit history and create credit reports. Creditors then use this information to determine your credit worthiness. For this post, we will be focusing on answering questions about credit reports you might have.

Who creates my credit report?

There are two main credit bureaus in Canada: Equifax and TransUnion. These companies collect, store, and share information about how you use credit. It is important to note that Equifax or TransUnion only collect information from creditors about your financial experiences in Canada.

If you have a credit history outside of Canada, some financial institutions may recognize it if you ask them.

What is shown on my credit report?

Credit reports include personal information such as current and previous addresses, social insurance numbers, and employment history. They will also show financial information and detailed account information about your credit cards and loans.

Personal information on your credit report:

  • name
  • date of birth
  • current and previous addresses
  • current and previous telephone numbers
  • social insurance number
  • driver’s license number
  • passport number
  • current and previous employers

Financial information on your credit report:

  • non-sufficient funds payments, or bad cheques
  • chequing and savings accounts closed due to money owing or fraud committed
  • credit you use including credit cards, retail or store cards, lines of credit and loans
  • bankruptcy or a court decision against you that relates to credit
  • debts sent to collection agencies
  • inquiries from lenders and others who have requested your credit report in the past three years
  • registered items
  • remarks including consumer statements, fraud alerts, and identity verification alert

Information about your credit cards and loans

  • when you opened your account
  • how much you owe
  • whether you make your payments on time
  • if you miss payments
  • whether your debt has been transferred to a collection agency
  • if you go over your credit limit
  • personal information available in public records, such as a bankruptcy

(Taken from Government of Canada: https://www.canada.ca/en/financial-consumer-agency/services/credit-reports-score/credit-report-score-basics.html#toc5)

 

Your mobile phone and internet accounts may also be reported on a credit report, despite that they’re not credit accounts. Your mortgage information may also appear – the credit bureaus will decide if they will count this information when determining your credit score. If you have a home equity line of credit added to your mortgage, it will be treated as part of your mortgage for your credit report. If it is separate from your mortgage, it will be reported separately.

Generally, negative information (missed payments on a debt, bounced cheques, accounts sent to collections, etc.) stays on your credit report for six years. Both Equifax and TransUnion typically remove bankruptcies from your credit report six years after the date you’re discharged as well. For consumer proposals, Equifax removes a consumer proposal from your report three years after you’ve paid off all your debts, and TransUnion removes it either three after you’ve paid off all the debts, or six years after you sign the proposal (whichever is sooner).

Who can see and use my credit report?

Those allowed to see your credit report include:

  • banks, credit unions, and other financial institutions
  • credit card companies
  • car leasing companies
  • retailers
  • mobile phone companies,
  • insurance companies
  • governments
  • employers
  • landlords

(Taken from Government of Canada: https://www.canada.ca/en/financial-consumer-agency/services/credit-reports-score/credit-report-score-basics.html#toc5)

 

When someone looks at your credit report, they access it through the credit bureau, which is then recorded on your credit report as an inquiry.

In BC, written consent is required to check your report. By signing an application for credit, you also allow the lender to access your credit report. Your consent can also allow the lender to share their information about you with the credit bureaus.

 

How do I access my own credit report?

There are a few different ways to get a hold of your credit report – both require you to go through Equifax Canada and TransUnion Canada, but depending how you want it, you can access your  report for free! It’s important to note that each credit bureau may have different information about you, so ordering copies from both is a good way to check for problems.

 

Order by mail or fax:

Ordering by mail or fax is a free method to access your credit report. Make your request in writing using forms provided by Equifax and TransUnion and provide copies of two pieces of identification. Your credit report will come in the mail after 5-10 days.

Order by telephone:

Equifax Canada: 1-800-465-7166

TransUnion Canada: 1-800-663-9980 (outside of Quebec)

1-877-713-3393 (Quebec)

You can also call either of the credit bureaus to get a free copy of your credit report. You must confirm your identity by answering a series of personal and financial questions, and you may also need to provide your social insurance number and/or a credit card. Your credit report will be mailed to you as well should you choose this route.

Online:

This is the fastest way to access your credit report – however, you must pay a fee if you want to see it right away. TransUnion now also has a free yearly consumer disclosure (credit report) you can access on their website.

Is there any way for me to explain information on my credit report?

Yes! You are allowed to attach a statement to your credit report to show your reasoning behind why you might have a few late payments on your record. This statement remains for six years and is viewable by any company receiving a copy of your credit report.

So, why is it important?

We’ve gone through a lot of information about credit reports, but you might still be wondering: why are they as important as they are?

A number of businesses and financial institutions check your credit report to make decisions about you. Banks check your credit report before approving you for credit cars and loans, landlords review your credit score to decide whether to rent to you, and even some employers check credit reports as part of the hiring process. Your credit report is essentially a history of you, and how you manage your money. This type of information is important to people, and can affect many different areas of your life, which is why it’s important for the information to be as positive and accurate as possible.

 


If you found this article interesting, here are some other posts you may like:

Statute of Limitations BC on Credit Cards

Re-Establishing Your Credit

Pleasure vs Pain – Purchasing with Credit vs Cash

 

Last updated August 9, 2018

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