Your credit report is a record of your dealings with lenders. Credit reporting agencies keep track of information such as how much credit you have available, how close you are to maxing out your credit limit, whether or not you have a history of missing payments, if you have experience paying back a variety of types of loans, and how long you've been successfully (or unsuccessfully) meeting your financial obligations to creditors. Banks or other consumer agencies that are considering you for a loan or other financial products will check your credit history to help them determine how much risk there is that you won't be able to pay them back on time.
Why You Should Check Your Own Credit Reports
Put simply, you should be checking your own credit reports for signs of trouble. With so much information on so many Canadians going back and forth between the credit reporting agencies and lenders, mistakes are sometimes made. You should be scrutinizing your own credit reports at least once a year to make sure they accurately reflect your personal information and your credit history. The other thing you should be looking for is signs of identity theft. If there are whole accounts that you don't own listed on a report or if there is a record of inquiries made about your credit history that are from companies you haven't done any business with, those could be mistakes or they could be an indication that someone else is making financial transactions under your name.
Getting Your Free Credit Reports
There are two major credit reporting agencies in Canada - TransUnion and Equifax - and you should be checking your reports from both of them (Experian used to offer credit reports as well, but has since ended that service). Both of these companies offer paid access to your information (very prominently displayed on their websites), with services that range from a one-time instant look at your current credit score to ongoing anti-identity theft credit monitoring. But by law, you are also allowed to receive a copy your own credit report by mail for free.
Whether or not you choose to pay for the additional services depends on your situation, but unless you feel the need to see your information instantly consider starting with a free look at your current report and go from there.
Below are the methods available from two major organizations. For all credit report requests, you will need to provide two pieces of identification (photocopied front and back for mail-in requests).
- Free report can be requested by mail or in person (the Ontario office is in Hamilton).
- Print out the form from the website (scroll down and click "How to qualify for a free credit report" under Credit Reporting Options).
- Free report can be requested by mail, fax or phone 1-800-465-7166.
- For mailed/faxed requests print out the form from the website (Click "Contact us" near the top of the page).
Correcting Mistakes in Your Credit Report
When you receive your report by mail you'll find a form has been included for you to use to correct any mistakes you find. If the incorrect information seems to indicate that you've been the victim of identity theft, however, you won't want to wait around while the paper is making its way through the mail. Contact the agency whose report you've found the information in immediately if you suspect identity theft. Call TransUnion Canada at 1-800-663-9980 and Equifax Canada at 1-800-465-7166.
Correct Information Cannot be Removed
Note that while the credit reporting agencies will correct or remove what is proven to be an error, you can't have accurate information removed just because you're unhappy with it - and neither can anyone else. There are some companies that offer to "fix" your credit report for a fee, but they can't make any more changes to a bad-yet-accurate credit history than you can.
Your Credit Report Vs. Your Credit Score
Your credit score is a single number that quickly reflects the overall health of the credit history contained in your credit report - the higher the number the better. TransUnion and Equifax use a rating between 300 and 900, but potential lenders and other organizations may use their own rating system. Your credit score may be used not only when someone is deciding whether or not to approve you for a loan or a new credit card, it can also be a factor in determining the interest rate you will pay.
Your credit score that has been calculated by the credit reporting agencies is available to you but only for a fee. You may be interested in learning your credit score if you suspect it needs to be improved or if you are planning to seek a loan or other new credit in the next few years.