A credit report is a document that lists your history of payments, what types of credit you have, and how much of it you are using. It is a snapshot of your overall financial situation.
A credit score is a number between 300 and 900, based on your credit report, used by lenders, banks, credit card companies and financial institutions to decide whether to lend you money or not, and what interest rate to offer you.
People with high credit scores usually pay lower interest rates while those with lower scores may find it difficult to get access to credit. Service providers like phone companies, rental companies, and even potential employers may check your credit report to see if there’s anything unfavourable on it.
There are two credit bureaus in Canada – TransUnion and Equifax. They collect information about how you pay your bills, when you pay, and how long it takes for you to pay the bills before recording this in their files. Based on this information, they rank the credit score of each person. A higher score means that a person is a good credit risk and will likely meet their financial obligations.
We highly recommend you ask for your credit report once a year and to go through it. You can get your report for free from one of the Canada bureaus by calling them. They will confirm your identity using your Social Insurance Number (SIN) and your credit card number.
TransUnion: 1-800-663-9980 (outside Quebec) or 1-877-713-3393 (within Quebec)
When you get your report, make sure that all the information is accurate. If you notice that a loan or financial service is under your name, but you did not request it, someone may be using your identity to apply for credit, or the credit bureau may not have the right information about you.
If you find an error on your credit report, you have the right to explain or protest. Contact the credit reporting agency to fix it. You can find more information here.
Finjoy Capital is not a financial advisory firm.
This article is for informational purposes only and is not a substitute for individualized professional advice.