When you borrow money, use your credit card or pay bills, information about your financial transactions is sent to a credit reporting agency. The agency records this information in your credit report, and uses it to generate your credit score. Your credit score is based on how much money you borrow, and how quickly you pay it back.
What your credit report will tell you
Your credit report contains identifying information, credit history information and public records. For example, your report may include:
- Identifying information – Including your name, date of birth, current and previous addresses and telephone numbers, social insurance number, and employment information.
- Credit history information – Listing of your credit accounts and transactions, debt sent to collections, banking information, and a list of parties requesting your credit information.
- Public records – Listing of items that could affect your ability to obtain credit, such as filing for bankruptcy and court judgements.
Learn more about what is included in your credit report.
How to order your credit report
There are 2 major credit reporting agencies in Canada – Equifax and TransUnion – you can order a copy of your credit report from 1 or both of these agencies. These agencies don’t share information, so it’s a good idea to check both.
Both agencies offer free credit reports by mail. Use this form to order a copy from Equifax. At TransUnion you can also order a free report in person or over the phone. The reports are also available online, but you’ll have to pay a fee.
How credit scores work
Your credit score will be between 300 and 900. The higher your score, the more likely you are to get a loan. A higher credit score can also help get you a lower interest rate, but there’s no guarantee.
You may need a credit score of 750 to lease the car you want, but a prospective landlord may be fine with 650. It’s up to each lender to decide.
Your credit score is determined by 6 factors. The first 3 are the most important:
- Your payment history
- If you’ve ever declared bankruptcy
- How much money you owe
- How long you have had credit
- The type of credit you use
- If you’re trying to get more credit
Learn your credit score
You must order a report separate from your credit report to learn your credit score. You can order this report from TransUnion or Equifax for a fee.
Credit information can remain in your report for 7 years
Negative information that may affect your credit score can stay in your credit report for up to 7 years. Not paying attention to your actions now can affect your ability to reach your future goals, such as buying a house.
Check your credit report once a year. If you find a mistake, ask the agency to fix it.