Quick Tips To Help You Better Understand Your Credit Report




When you apply for a refinance loan, lenders normally look at your credit score to help them decide whether to give you credit or a loan. Credit reporting agencies allow you to check your credit report and your credit score.


Through these reporting agencies, you can get your credit score, as well as a copy of your credit report. Your credit report is a record of your credit history and includes information about any credit or loan products you’ve had, your repayment history, applications for credit or loans, and any bankruptcies, defaults or court judgments you’ve had.


Here's some information we found for you in the Financial Consumer Agency of Canada's section of the government of Canada's Website. The Financial Consumer Agency of Canada (FCAC) ensures federally regulated financial entities comply with consumer protection measures, promotes financial education and raises consumers’ awareness of their rights and responsibilities.


The information that follows was found on this link:


Financial information on your credit report


Your credit report may contain the following financial information:


• non-sufficient funds payments, or bad cheques

• chequing and savings accounts closed “for cause” due to money owing or

fraud committed

• credit you use, including credit cards, retail or store cards, lines of credit and

loans

• bankruptcy or a court decision against you that relates to credit

• debts sent to collection agencies

• inquiries from lenders and others who have requested your credit report in

the past three years

• registered items, such as a lien on a car that allows the lender to seize it if

you don’t make payments

• remarks, including consumer statements, fraud alerts and identity verification

alerts

Your credit report contains factual information about your credit cards and loans,

such as:

• when you opened your account

• how much you owe

• if you made your payments on time

• if you missed payments

• if your debt has been transferred to a collection agency

• if you went over your credit limit

• personal information that’s available in public records, such as a bankruptcy


What to look for on your credit report


Lenders use codes to send information to the credit bureaus about how and when

you make payments.


These codes have two parts:


• a letter shows the type of credit you're using

• a number shows when you make payments


You may see different codes on your credit report depending on how you make

your payments for each account.



For example:


• If you have a credit card account that you paid on time, it’ll be reported as “R1”

• If you have a line of credit, and you missed a payment by 45 days, it’ll be reported as “O2”

• If you have credit card debt and you’re being contacted by a collection agency for payment, it’ll be reported as “R9”


The best rating is 1. Any number higher than 1 will likely hurt your credit score.


How to get a free credit report

Order a copy of your credit report from both Equifax Canada and TransUnion Canada. Each credit bureau may have different information about how you have used credit in the past. Ordering your own credit report has no effect on your credit score.

Equifax Canada refers to your credit report as “credit file disclosure”.

TransUnion Canada refers to your credit report as “consumer disclosure”.

Order by mail or fax

  • Make your request in writing using the forms provided by Equifax and TransUnion

  • Provide copies of two pieces of acceptable identification, such as a driver's licence or passport

  • You must receive your credit report by mail

Order by telephone

  • Call the credit bureau and follow the instructions

  • Equifax Canada Tel: 1-800-465-7166

  • TransUnion Canada Tel: 1-800-663-9980 (except Quebec) Tel: 1-877-713-3393 (Quebec residents)

  • Confirm your identity by answering a series of personal and financial questions

  • You may also need to provide your Social Insurance Number and/or a credit card number to confirm your identity

  • You must receive your credit report by mail


Get your credit report online

You may pay a fee to order your credit report online if you want to see it right away. TransUnion allows you to order your credit report online once a month for free.

Get your credit score

A lender will use your credit score to determine if they will lend you money and how much interest they will charge you to borrow it. Your credit score is a number calculated from the information in your credit report. It shows the risk you represent to a lender compared to other consumers.

Knowing your credit score before a major purchase, such as a car or a home, may help you to negotiate lower interest rates.

You usually need to pay a fee when you order your credit score online from the two credit bureaus.

Some companies offer to provide your credit score for free. Others may ask you to sign up for a paid service to see your score.

Make sure you do your research before providing a company with your information. Carefully read the terms of use and privacy policy to know how your personal information will be used and stored. For example, find out if your information will be sold to a third party. This could result in you receiving unexpected offers for products and services. Fraudsters may also offer free credit scores in an attempt to get you to share your personal and financial information.

Always check to see if a website is secured before providing any of your personal information. A secured website will start with “https” instead of “http”.

What is credit monitoring

Canada’s credit bureaus, as well as many credit card issuers and financial institutions, offer credit monitoring services. These services provide you with a notification after certain updates to your credit file, such as a credit inquiry.

You could consider using this service if you think you’ve been the victim of fraud or if you have been affected by a data breach. This can help you see if somebody is trying to apply for credit in your name.

You usually need to pay for these services.

How often you should check your credit report

Consider requesting your report from one bureau, then wait six months before you order from the other bureau. By spacing out your requests, you may be able to detect problems sooner.

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