Your personal credit report and credit score are generated from your credit file.
Credit granters, future landlords and employers use them to assess your credit worthiness. A poor credit history may mean you have to pay more to borrow money or you may be refused a loan or credit card.
Canada has two credit reporting agencies: Equifax Canada and TransUnion Canada. They are private companies that are governed by regulations regarding the use and access to personal credit reports.
Credit granters are businesses, financial institutions, credit card companies, auto leasing companies and retailers who extend credit. They regularly provide the credit reporting agency with factual information about your credit transactions, payments and loan details.
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Collection agencies, offices that handle child support and public records that have been filed with the court are also sources of information that credit reporting agencies will use to update their separate credit file about you.
The credit reporting agency will sell your credit report to their credit granting members.
When you apply for credit, a credit report and credit score will be generated so that they can access your credit history before granting you credit. These inquiries will be listed on your credit report for other credit grantors to see.
Your credit report may contain the following personal information: your name, birth date, current and previous addresses and phone numbers, social insurance number, driver’s license, passport numbers and current and previous employers.
Your factual credit history information may include when you opened your account, how much you owe, if your payments have been on time or missed and if you go over your credit limit. This information may be provided for loans, lines of credit, credit cards and non-credit accounts such as mobile phone and internet accounts.
Your mortgage information and payment history may be included in your credit report, depending on the credit reporting agency, and may count toward your credit score.
Negative banking information can also be included, such as non-sufficient fund cheques and accounts closed “for cause” due to money owing or fraud committed by the account holder.
It may also include information from public records such as orderly payment of debts, consumer proposals, bankruptcies, judgments, liens on a car or house, seizures, garnishment of wages and collection accounts.
Lenders and others who have requested your credit report will be listed. You can ask to have a statement added to your credit report if you disagree with any of the information or suspect that your identity or information may have been stolen or used fraudulently. This will alert credit granters to verify your identification prior to granting credit.
Provincial and territorial law regulates the specific time that information is retained in a credit file. Most negative information is usually removed after six or seven years. Positive information, such as accounts that were paid on time, may be kept longer.
In Canada, a credit score is a three-digit number that is calculated using a mathematical formula based on the information in your credit file.
You are given points for actions that demonstrate you use credit responsibly. Points are lost for things that show you have difficulty managing credit. Your credit score is an evaluation of your credit risk at that particular point in time and is recalculated for each request.
A credit score is a number between 300 and 900. The higher the score the more likely you will be approved for credit. Lenders may also use your credit score to set credit limits and interest rates. It is worth asking for a lower interest rate on a loan if you have a high credit score. Lenders will also consider your income, job and other assets you own before granting credit.
You can contact the credit reporting agencies to review what information they have in your credit file. Look for errors in your file that may affect your applications for credit. Question inquiries from lenders that you don’t deal with because this may be a sign that someone is trying to steal your identity.
Phone, mail or fax in your request to Equifax Canada or TransUnion Canada to obtain your free credit report. There will be a charge if you make a request online.
Ordering your own credit report has no effect on your credit score.
You have the right to dispute information in your credit report that you believe is wrong, and you can ask the credit reporting agencies to correct errors free of charge. A form comes with your credit report for reporting any errors. Be wary of credit clinics who offer to fix the information in your credit report. Only you and your credit granters can alter your personal credit file.
There is a fee to order your credit score. Be cautious of anyone offering free credit scores because they may be attempting to get your personal and financial information for fraudulent purposes.
