If you’ve ever borrowed money to buy a car or a house or have applied for a credit card or any other personal loan you have a credit report.
Your credit report is a snapshot of your financial history. It contains information about loans you have taken out, whether you regularly pay on time, how much you owe, what your credit limit is on each. You build a good credit history by consistently making payments on your credit cards and other loans on time.
It is one of the primary tools that creditors, like banks and credit card companies, use to decide whether to grant you credit. If you have no credit history, or a bad credit history, you may have more difficulty borrowing money, especially large amounts such as a mortgage.
The two major credit reporting agencies that keep your information on file are Equifax Canada and TransUnion Canada. It is recommended that you contact them annually to obtain a free copy of your credit report. Your free credit report is called a “credit file disclosure” by Equifax Canada and a “consumer disclosure” by TransUnion Canada. You can obtain your report in person, by mail, phone, fax and now online.
Check your credit report for errors and signs of identity theft. You can ask the credit reporting agencies to correct errors. It’s free. Remember, only errors can be corrected – no factual, accurate information related to a credit account can be changed by you or anyone else.
- mistakes in your personal information, such as wrong mailing addresses or incorrect date of birth
- errors in credit card and loan accounts, such as a payment you made on time that is shown as late
- negative information about your accounts that is still listed after the maximum number of years it is allowed to stay on your report
- accounts listed that you never opened yourself, which could be a sign of identity theft
Source: Financial Consumer Agency of Canada
To improve your credit rating, always make your payments on time. If you cannot pay the full amount, make at least the minimum payments. If you will have trouble paying a bill, contact your creditor immediately. Negotiate a plan to repay your debt. If this is not possible we recommend you schedule an appointment to see a credit counsellor.
If you would like more information on credit reports and credit scoring visit the Financial Consumer Agency of Canada.