What is a credit report?
A credit report is a detailed summary of a person's credit history. According to the Financial Consumer Agency of Canada, your credit report may include:
- Particulars like your name, where you live (and have lived), your SIN, contact details, date of birth and where you work (and have worked)
- Details about credit you already possess (credit card, line of credit, loans or mortgages)
- Banking information and your history with cheques (NSFs, etc.)
- Anything on the public record like whether you've declared bankruptcy or have credit-related court judgements against you. Secured loans may also appear (this is where you've received a loan by securing it with an asset like a house.)
- Information about balances sent to a collection agency for payment
- The number of times inquiries have been submitted requesting details about your credit history or credit report
What are credit-reporting agencies?
Also sometimes called a credit bureau, a credit-reporting agency collects information about you and your credit history to create a credit report and arrive at a credit score. Canada has two credit-reporting agencies: Equifax and TransUnion.
In addition to collecting this information, Canada's credit-reporting agencies will also provide a copy of your credit report and credit score, upon request. No one can access it without your consent though. You have a right to know your credit report and credit score, and only those given permission by you are allowed to access this information.
Who can view your credit report?
No company can access your credit report and score without your consent. The consent is obtained usually as you fill out credit applications which allow the institutions you are applying with to check your credit history.
The agencies will only provide information from your credit report after your permission is obtained and only if the request is credit-related, regarding debt collection, the rental of a property, or an application for employment or insurance where permitted.
How to read a credit report
How you repay your debts is one of the key factors in your credit history and credit score. As a result, it is featured prominently in your credit report. The following will help you understand some of the ratings and symbols you may see on your credit report (source Financial Consumer Agency of Canada):
When reporting your information, lenders submit a rating to the credit-reporting agency. This rating is a description of your repayment habits based on a scale of 1 to 9. The lower the better:
- A "1" means you pay your bills on time, within 30 days of the due date
- A "9" means you have not paid your bills at all
In addition to the "rating", a letter may be assigned which is used to describe the type of credit you have:
- "I" stands for installment. What this indicates is that the money you borrowed was a one-time event (like a loan). You're expected to make payments on a regular basis for an amount that has been agreed upon until the loan is paid off.
- "O" stands for open credit. A good example of this is a line of credit. You can borrow money as you need it; however there is an upper limit and regular payments are required to keep it in good standing.
- "R" stands for "revolving" credit of which credit cards are an example. How much you owe, and how much you are required to pay will vary; what does not vary is the need for regular payments.
Additionally, your credit report may also include a payment chart detailing your payments over the last two years, alongside a payment scale that details how often you paid your bills 30, 60 or 90 days after the due date.
Where to get a credit report
Where to get a credit report is easy in Canada as there are only two credit-reporting agencies: Equifax and TransUnion.
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