Credit reports can have a major impact on your life, but many Canadians do not know much about them.
"Our recent survey on Canadians' knowledge of their rights and responsibilities found that knowledge of credit reports was particularly low," says FCAC Commissioner Ursula Menke. "The vast majority of people—90 percent—do not know that they can obtain a credit report free by mail, while 62 percent do not know how to dispute an entry in their credit report."
Credit reporting agencies track how you use credit products, such as credit cards and loans, and pay your bills. This information is used to create your credit report and credit score. Lenders may use this information when they decide whether they will lend you money, and how much they will charge you to borrow it. Employers and landlords may also check your credit report when you apply for a job or rent housing.
"It's a good idea to check your credit report at least once a year, and doing so will not hurt your credit score," says Commissioner Menke. "Think of it as an annual checkup for your financial health."
To help Canadian consumers, the Financial Consumer Agency of Canada (FCAC) has updated and added to the free, unbiased information it provides consumers about credit reports.
Credit report and score basics
How can I benefit from a good credit history?
- You may be able to get a lower interest rate on loans, which can save you a lot of money over time.
How long does negative information stay on my credit report?
- The exact amount of time varies by type of information and by province or territory. For most negative information, the maximum is six or seven years.
How can I improve my credit score?
- Always make your payments on time even if you can only manage the minimum amount. If you think you will have trouble paying a bill, contact the lender to see if you can work out a special arrangement.
Will shopping around for a car or mortgage hurt my score?
- You may reduce the impact if you shop around within a two-week period. All inquiries related to auto or mortgage loans made during this time are usually combined and treated as a single inquiry.
Is my mortgage included in my credit report?
- Your mortgage information and your history of mortgage payments may appear in your credit report and may count toward your credit score. This depends on the practices of each credit reporting agency.
Order your free credit report
You have the right to see your own credit report. FCAC's tip sheet, How to Order Your Credit Report has details on how to get your credit report free of charge:
- You may order your free report by mail, fax, telephone or in person.
- You must receive it by mail or in person.
- If you choose to access your report online, you will have to pay a fee.
Correct any errors and check for fraud
Ensure the accuracy of your credit report by checking carefully for errors. Your credit report will also show if you have been a victim of fraud. FCAC's tip sheet, Protecting Your Credit Report: How to Correct Errors and Check for Fraud, outlines the steps to take if you have any questions about the information in your report, and also what to do if you are a victim of fraud.
FCAC has also posted two Tip Clips on its YouTube channel to help consumers find out more about credit reports and how to protect themselves from fraud.
About FCAC
With educational materials and interactive tools, the Financial Consumer Agency of Canada (FCAC) provides objective information about financial products and services to help Canadians increase their financial knowledge and confidence in managing their personal finances. FCAC informs consumers about their rights and responsibilities when dealing with banks and federally regulated trust, loan and insurance companies. FCAC also makes sure that federally regulated financial institutions, payment card network operators and external complaints bodies comply with legislation and industry commitments intended to protect consumers.
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Got your Credit Report?
Need help understanding it?
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Want to know if your credit score is good?
Angela Kroemer, AMP
Mortgage Professional
TMG The Mortgage Group Canada Inc.
TMG Sharie Marie Mortgage Team
Local: 1.250.650.4182
TFP: 1.888.679.0190
Fax: 1.888.679.0192
akroemer@mortgagegroup.com
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OTTAWA, Sept. 14, 2012 /CNW
FAQs
When freezing your credit to limit the processing of new credit applications, you must make a separate freeze request at each of the national credit bureaus (Experian, TransUnion and Equifax).
What are 5 things not on a credit report? ›
Your race, color, religion, national origin, sex and marital status. US law prohibits credit scoring from considering these facts, as well as any receipt of public assistance, or the exercise of any consumer right under the Consumer Credit Protection Act.
What is a ghost credit report? ›
Someone who lacks a credit history with one of the nationwide credit reporting companies is considered "credit invisible" or a credit ghost. "Unscored" consumers have a credit file, but the data is too sparse or too old to produce a credit score.
What are 5 reports that can ruin your credit score? ›
Here are five ways that could happen:
- Making a late payment. ...
- Having a high debt to credit utilization ratio. ...
- Applying for a lot of credit at once. ...
- Closing a credit card account. ...
- Stopping your credit-related activities for an extended period.
A freeze can give you a false sense of security — you may still be susceptible to credit fraud or other fraud involving your Social Security number. A credit freeze won't affect your current accounts, but if a thief steals the information on an existing account, your credit may be used without your permission.
Is freezing your credit a good idea? ›
Yes, placing a freeze on your credit reports is one of the best ways to help protect you from fraudulent credit applications. It's free and you can complete it fairly quickly online or by phone. Unfreezing, also known as thawing, your credit is typically quick when you need to apply for credit.
What are 2 items that are not in your credit score? ›
Most of Your Everyday Bills Are Not Reported
While your credit card accounts and lines of credit are pulled into your credit report, your day-to-day bills, such as your rent and utility payments like Internet, water, and electricity aren't roped in.
What is the best FICO score possible? ›
According to research by credit bureau Experian®, a score above 760 could qualify you for the best interest rates. Read on to learn more. Generally speaking, the highest credit score possible is 850, according to the most common FICO and VantageScore credit models.
What are two things not found on your credit report? ›
Your credit report does not include your marital status, medical information, buying habits or transactional data, income, bank account balances, criminal records or level of education. It also doesn't include your credit score.
Is wiping your credit illegal? ›
FACT: No one can legally remove negative information from a credit report that is accurate. Most negative information generally stays on your report for seven years while bankruptcy information can remain on the report for ten years.
Correct information cannot be removed and stays on file for at least seven years. So, if your score is low due to accurate negative information, you'll need to repair your credit over time by making payments on time and decreasing your overall amount of debt.
What is the number one credit killing mistake? ›
Mistake 1: Late payments.
What habit lowers your credit score? ›
Making late payments, even a single day late, can significantly affect your credit. This becomes especially true if you make a habit of paying late. Some lenders or credit card companies will charge you a fee for being a single day late and could cut you off from making further purchases on the account.
What are the six C's of bad credit? ›
To accurately find out whether the business qualifies for the loan, banks generally refer to the six “C's” of credit: character, capacity, capital, collateral, conditions and credit score.
Do I need to call all 3 credit bureaus to unfreeze my credit? ›
If you froze your credit report with each of the major credit bureaus — Experian™, Equifax® and TransUnion® — you'll need to contact all three individually. You may also need the PIN or password you received when you initially froze your credit. Keep in mind, a credit freeze and credit lock are different.
Do I need to lift a credit freeze at all three? ›
If you can find out which credit bureau they use, you only need to lift your freeze with that particular credit bureau. If not, you will need to lift all three of your security freezes.
How many times can I freeze and unfreeze my credit? ›
It's free to freeze and unfreeze your credit report as often as you like. Ultimately, freezing your credit adds an extra layer of security to your identity and accounts.
Can you lock and freeze your credit at the same time? ›
Credit report locks allow you to lock and unlock your Equifax credit report. Please note: You cannot have both a freeze and lock on your Equifax credit report at the same time. If you prefer to switch from one service to the other, you will first need to remove your current service and to replace it with the other.
