Everyone who's ever borrowed money to buy a car or a house or applied
for a credit card or any other personal loan has a credit file.
Because we love to borrow money, that means almost every adult
Canadian has a credit file. More than 21 million of us have credit
reports. And most of us have no idea what's in them.
Are there mistakes? Have you been denied credit and don't know why? Is
someone trying to steal your identity? A simple check of your credit
report will probably answer all those questions. And it's free for the
asking.
What's in a credit report?
Each of the accounts includes a notation that includes a letter and a
number. The letter "R" refers to a revolving debt, while the letter "I"
stands for an instalment account. The numbers go from 0 (too new to
rate) to 9 (bad debt or placed for collection or bankruptcy.) For a
revolving account, an R1 rating is the notation to have. That means you
pay your bills within 30 days, or "as agreed."
What is a credit score?
A credit rating or score (also called a Beacon or a FICO score) is not
part of a regular credit report. Basically, it's a mathematical formula
that translates the data in the credit report into a three-digit number
that lenders use to make credit decisions.
The numbers go from 300 to 900. The higher the number, the better. For
example, a number of 750 to 799 is shared by 27 per cent of the
population. Statistics show that only two per cent of the borrowers in
this category will default on a loan or go bankrupt in the next two
years. That means that anyone with this score is very likely to get that
loan or mortgage they've applied for.
How to get a copy of your credit report and credit score?
There are two national credit bureaus in Canada: Equifax Canada and TransUnion Canada.
For TransUnion, the instructions to get a free credit report by mail are available at:
https://www.transunion.ca/personal/credit-report
For Equifax, the instructions are at:
https://help-en.equifax.ca/app/answers/detail/a_id/300/noIntercept/1
