Credit Report How To

Why Should I Care About My Credit Report?

A credit report is a point in time picture of your credit history. It is one of the main tools lenders use to decide if you should be given credit, how much, and determine how big a risk you are.

The healthier your credit report is, the more favourable terms you can negotiate when applying for loans.

Your credit file is created when you first borrow money or apply for credit. On a regular basis, companies that lend money or issue credit cards, including banks, finance companies, credit unions, and retailers, send specific information related to your transactions to credit reporting agencies.

Credit reporting agencies collect, maintain, and provide your credit report to landlords, businesses, employers, etc. who need to check your financial responsibility. This information is your complete financial history, from the lender’s perspective.

When you apply for a loan, credit card, or other types of credit, your credit report will likely be checked to see if you are a suitable risk.

It's wise to check your credit report once a year for accuracy and signs of fraud. Identity theft is becoming more common. Early detection is the key to avoid suffering long-term financial consequences.

What Credit Agencies Operate in Canada?

The two main Credit Agencies are:

Most creditors are registered with both agencies, so the information should be nearly identical from both.

How to Get Your Free Credit Reports

A Consumer Disclosure is a complete account of all the information on your credit report. A Consumer Disclosure lists all inquiries made to your credit information, including account management inquiries, non-credit-related inquiries and your own inquiries.

You can request a free credit report from each of the Agencies. The links below will take you directly to the page on each credit agency's site that explains how to obtain your free credit report:

The agencies will sell you your credit report online. You can use this if you need it immediately, but by law they must provide you with a free report – this just takes longer to obtain.

How to Review Your Credit Reports

A credit report has 4 categories:

Personal Information
Credit History
Inquiries
Public Records

First, check that your personal information is accurate and up to date.

Check your credit history and inquiries. Make sure that there are no credit cards or loans that you did not authorize. Unauthorized inquiries are a sign that identity theft is being attempted.

The public records section will normally be blank, unless you have been the subject of legal proceedings.

How to Obtain Credit Reports for Business

You can sign up for service at either of the major credit agencies. Under most circumstances, signing up with one should be sufficient. As the information provided by both is very similar, price should be the main consideration when selecting an agency.

How to Correct Errors on your Credit Reports

Each agency has a dispute process that you will need to follow:

How to Establish a Good Credit Rating

The easiest way to establish a good credit rating is to pay all your bills on time always. Don’t accumulate a lot of debt on your credit cards. Don’t buy things that you may not be able to afford and could have trouble paying for. Don’t get caught in a credit crunch by a job loss or unexpected hardship; plan for these contingencies.

If you don’t have a credit history, then apply for a credit card, any pay the balance in full each month. This will help greatly if you need to apply for a loan or mortgage in the future.

How to Reestablish Credit after Bankruptcy

A bankruptcy will damage your credit rating for many years. You likely won’t be able to get any credit at all for several years. As soon as you can, get a credit card with a low credit limit. Pay off the charges in full every month. After a few years, apply for another credit card or secured loan. After a decade or more (assuming no additional issues), your credit worthiness should approach the average.

How to Identify Fraud or Identity Theft

Obtain your free credit reports
Check for any loans, credit cards, etc. that you did not apply for
Verify all the inquiries that have been done against your credit file have been authorized by you

If you find anything unusual, then notify the credit agency immediately. Also, contact the institution involved. Often there is a 24 hour hotline that can be called. Mention possible fraud and that it is urgent in order to get the quickest action possible.

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