Your Canadian credit score can make a big impact on your life, whether it’s to get a phone, apartment rental, or mortgage. The best way to get a sense of your credit situation is to get your credit score and credit report, which will give you a window into your full credit history and how it’s affecting you.
Check out our guide below to understand the mechanics of credit scores and reports, and how to make the right choice when buying one for yourself.
What’s the difference between my credit score and a credit report?
A credit report outlines every loan a person has taken out in the last six years. This includes information such as if bills are paid on time, how much is owed, and how close a person is to their credit limit. On a person’s report, R represents revolving debt, and it is rated from 0 (unknown) to nine (bad debt). An R1 rating means a person pays bills within 30 days, or as agreed. All of this credit info remains on a person’s file for at least six years.
While it’s easy to confuse the two, a credit score is not featured in a regular credit report. It’s a mathematical formula used to give a three-digit number for lenders to use to make decisions. The number goes from 300 to 900, where the higher the number, the better. Typically, credit scores lower than 650 have trouble receiving new credit. The exact formula is secret, but, similar to the credit report, there are a few factors that’ll affect it:
- Payment history on bills and interest
- Outstanding debt
- Credit account history
- Recent inquiries from a lender or business
Canadians have access to both credit scoring and credit reports, with two main national companies offering these services: Equifax and TransUnion. If you’ve been asked to provide credit details by a potential landlord or lender, make sure you get details on exactly what kind of credit score or credit report they need.
Equifax is a global data, analytics, and technology company that runs out of Atlanta, Georgia and operates in 24 countries. This includes offering credit report and credit score services to Canadians.
For $15.50 you can order and access your credit report online, including an easy-to-read summary and the ability to contact customer care representatives. To get both your credit report and your credit score (that three-digit number), it costs $23.95, but this also comes with a summary of the factors that are impacting your credit score and report.
Equifax also offers packages running from $11.95 to $29.95 for continuous access to this information, as well as tools to protect Canadians from identity theft.
For example, for $19.95 per month, the Equifax Complete Premier package offers:
- Credit score and report monitoring
- Credit score trending
- Identity theft protection, such as internet scanning, identity restoration, and up to $50K in identity theft insurance
Canadians can also access a paper version of their credit report for free — if you just want the basics. All you need to do is to fill out this form from Equifax, mail it in, and the report will be arrive in 2-3 weeks.
TransUnion is the alternative credit report and score company in Canada, and while Equifax charges for online access to a credit report, TransUnion gives it for free!
For access to a yearly consumer disclosure, either via mail or online, check out TransUnion. A consumer disclosure is a complete account of all the information on a credit report and also includes all inquiries made into a person’s credit information. It provides a bit more detailed information than a credit report.
But, if you want access both your credit score and credit report with TransUnion, you will have to choose the TransUnion Credit Monitoring package for $19.95 per month. This package includes:
- Access to your credit report and score
- Alerts on any credit report changes
- Credit and debt analysis
- $50K Identity Theft insurance.What other companies offer these services in Canada?
Are free credit reports real?
Many other companies operating in Canada use the same information as both TransUnion and Equifax. For example, Credit Karma offers a free credit score and report, but the information is based on data from TransUnion. The company is able to offer these services for free thanks to their partnership with other companies, which advertise their services to you on Credit Karma’s platform.
Is it safe to use these companies?
Both Equifax and TransUnion are international companies with strong reputations, and they are known to be completely safe to use. Ordering these services won’t affect your credit score and report.
The danger lies in using companies that don’t offer you the guarantee of privacy. In order to gain access to your credit report, you’ll need to give out a lot of detailed personal information and, potentially, even your social insurance number. If this information gets into the wrong hands, you could be at risk for identity theft. Before you order a credit score or report from another company, be sure to closely investigate their privacy policies.
What if I see an error on my report?
An estimated 10-33 percent of credit files contain errors. This happens when there are multiple people with with very similar names, for example. A person has the right to write a credit agency and dispute a claim on their credit history, with the suggestion to send along documents to support that claim. If the item is not changed, a person can also add a brief statement to the credit file in their defense.
Making smart choices with the credit products and services you use can dramatically improve your credit score in the long run.
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