>Credit reports 101

What is a credit report?

A credit report is a detailed record of your credit history. In Canada, your credit reports are maintained by TransUnion and Equifax, the two major credit reporting agencies or credit bureaus.

Creditors and lenders use your credit report to determine your risk as a potential new borrower. Credit reporting bureaus collect detailed information about you, your credit and debt history. 

As we'll outline below, knowing what's on your credit report at all times is key to monitoring your financial status and spotting early signs of identity theft. 

>What information is on a personal credit report?

  • Personal Identification: information such as your name, date of birth and Social Insurance Number (optional). Your current and previous addresses and current and previous employers will also appear on your credit report.
  • Credit Information: provides details of your credit accounts and transactions, and shows if payments are being made on time or not. Your payment history is also shown.
  • Banking Information: includes information on your bank account and NSF cheque history.
  • Public Record Information: contains information about secured loans, bankruptcies and/or judgments.
  • Third-Party Collections: contains information about any involvement with a collection agency trying to collect on a debt or delinquent account.
  • Consumer Statement: information you may want to add to your credit account.
  • Inquiries: lists all organizations or individuals that have requested a copy of your credit report in the past six years. See below for more.

Not everything about you can be found on your credit report. Your race, marital status, religious beliefs, political affiliation, medical records, arrests and criminal records aren't on your credit report.

>Who has access to my credit report?

Any time you apply for credit, you will have to fill out an application form. By signing it, you agree to a credit assessment and give permission to the business involved to examine your personal credit report.

Businesses or individuals who may access credit reports include bankers, mortgage brokers, retail outlets (if you applied for a store credit card or financing), car dealerships and utility and cell phone companies. Potential landlords and employers may also use your credit report to evaluate your credit worthiness and reliability.

As well, any vendors you currently do business with may access credit reports on a regular basis to determine if your credit worthiness has changed.

Your financial situation may change any time through a job loss, new career, divorce or other situation. If this affects your ability to pay your debts or bills, your lenders will want to know.

>Why you should check your credit report:

  • To see how lenders, landlords and employers see you
  • To understand your financial health and where you need to make improvements
  • To fix any errors or omissions
  • To watch for signs of identity theft or fraud

 

Accessing your credit report is an essential step in managing your daily financial life. You may order your personal credit report from Equifax, Canada's top credit bureau, here.

 

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