Your credit score is an important factor when it comes to accessing credit products, like credit cards, personal loans, car loans, and mortgages. Not only can your credit health affect your ability to secure these products, but also the interest rates you’re charged. In fact, your credit can also influence your insurance rates, as well as your ability to rent an apartment or secure a job.
It’s helpful to understand who can conduct a credit check in Canada, and why they perform these checks, to help you better manage your credit and finances.
Key Points
- A credit check in Canada can be performed by various entities, including lenders, employers, landlords, and insurance companies.
- Anyone who wants to perform a hard credit report will need your consent to do so.
What Is A Credit Check?
A credit check occurs when an organization or an individual requests access to a consumer’s credit report from a credit bureau. The main goal of a credit check is to assess a consumer’s creditworthiness during an application process.
There are two different kinds of credit checks in Canada:
Hard Credit Checks
Hard pulls (or hard credit checks) are typically performed by lenders and creditors you’ve applied with. To conduct a hard credit check, lenders and creditors must first get your permission. They’ll use your credit information to assess your creditworthiness before determining whether to approve your loan application.
Do note that hard credit checks can negatively impact your credit score. However, a single inquiry usually has only a small impact. On the other hand, several hard inquiries within a short period of time could cause a more severe negative impact.
| Pro Tip: Multiple hard inquiries within a specific amount of time (around 7 to 45 days) on certain credit products like mortgages and car loans are counted as a single inquiry. This exception allows borrowers to apply with multiple lenders and compare offers. |
Soft Credit Checks
Soft pulls (or soft credit checks) happen when you check your own credit report. They also happen as part of a loan pre-approval process when a lender checks your credit profile.
Further, companies or organizations that have a non-credit relationship with you may also perform a soft credit check. Non-credit relationships may include the following:
- Employers
- Landlords
- Insurance companies
A soft pull has no effect on your credit score, so you can check your credit as often as you want.
How Long Does A Credit Check Stay On Your Credit Report?
Hard credit checks can stay on your Equifax credit report for up to 3 years, and up to 7 years on your TransUnion Consumer Disclosure report.
Soft credit checks will only be visible to you when you pull your own credit report.
How Do Lenders And Other Third Parties Check Your Credit?
In order to conduct a hard credit inquiry, lenders and creditors must first get your permission. When you sign a loan application, you’re allowing the lender to view your credit report when you first apply for credit and any time while your account remains open.
In some provinces, companies or individuals are only required to inform you that they’re checking your credit report. These provinces include Saskatchewan, Nova Scotia, and PEI.
Soft credit checks do not require your consent and provide less information compared to hard inquiries.
How Do You Check Your Credit Score?
You can access your credit score from Canada’s two main credit bureaus, Equifax and TransUnion.
Your credit score from Equifax is available for free and is updated monthly. You can also obtain your credit score with TransUnion, though you will need to pay a small monthly subscription fee for access (though your credit report is available for free). If you live in Quebec, you can access your TransUnion credit score online for free.
Alternatively, you can check your credit score online for free using the following resources:
| Cost | Credit Score | Credit Report | ||
 | Free | Yes | Yes | Visit Site |
 | Free | Yes | Yes | Visit Site |
 | Free | Yes | Yes | - |
Who Can Check Your Credit In Canada?
The two credit bureaus in Canada, create a file for every Canadian who has or is currently using credit products that are reported to that specific bureau. Keep in mind that not all lenders or creditors report to both bureaus, so your Equifax credit score may be different from your TransUnion credit score.
The following people or organizations are legally allowed to check your credit (with your permission):
Credit Card Companies
When you apply for a new credit card, you should expect to undergo a credit check, as the credit card company will want to assess your creditworthiness. Most credit cards will have a minimum credit requirement, so be sure you meet that before applying.
Lenders
Most lenders will pull your credit before they approve your loan application. But, keep in mind that there are a variety of alternative lenders who do not check credit as a part of their approval process. So, if your credit may impede your ability to get approved for a loan, consider doing some research on ‘no credit check’ lenders.
Banks
When you apply for a loan or credit product with a bank (like mortgages, second mortgages, lines of credit, personal loans, and business loans), they’ll usually check your credit. Banks use a variety of methods to assess your creditworthiness, but often your credit report and score are given a lot of weight during the approval process.
Landlords
A new landlord may require a credit check as part of the application process. They’ll be looking for a healthy credit history that paints the picture of a financially responsible individual who always makes their payments on time and doesn’t have a serious debt problem.
Potential Employers
Something that many Canadian consumers may not know is that prospective employers may want to check your credit before they give you a job. While this isn’t common practice at all companies, depending on the job you’re interested in, a healthy credit history could be an asset that solidifies you as the best candidate.
Yourself
You can check your credit at any point during the year and as many times as you like without hurting your credit. If you’re interested in getting a copy of your credit report, you can do so with either credit bureau or with various resources online.
What If You Don’t Recognize The Credit Inquiry?
If you notice a credit inquiry that you believe was made in error or even fraudulently, you should have it reported immediately.
Under the inquiries section of your credit report, there will be a list of the names of companies or individuals who received a copy of your credit report. If you find out that your credit report was accessed without your consent or outside of provincial or federal law, reach out to the company that made the inquiry and the credit bureau.
It’s important to note that some companies use third-party services to pull credit reports. In this case, you might not be familiar with the name on the inquiry. Regardless, it’s still recommended that you check with the creditor to see if they used a third party to access your credit report. If not, this may be a sign of potential fraud or identity theft.
You may be able to ask the company to change the inquiry from a “hard” pull to a “soft” pull, which won’t affect your credit score.
Who Can’t Check Your Credit?
Credit checks are meant for those who have, or are interested in entering, some form of financial relationship with you. But, this doesn’t mean that just any company can perform a hard pull of your credit. Any company or organization that wants to access your credit file must first get your permission.
This means that you always have a choice when it comes to who can see your credit. Just keep in mind that if you refuse a credit check, there’s a risk that you may not get approved for the loan, credit product, or apartment that you applied for.
What Do Lenders See When They Check Your Credit Report?
A credit report provides a detailed summary of your credit history. Creditors and lenders rely on these reports to decide whether to approve you for credit and determine the interest rates for which you qualify.
Your credit report typically includes the following information:
Information About Yourself
Various details are included in your report for identification purposes. This may include your:
- Name
- Address
- Date of birth
- Social Insurance Number (SIN)
- Employment information
Credit Accounts
Also known as “tradelines”, your credit accounts that you have with lenders may be listed on your report. Each account contains information on the following:
- Type of account (ie. credit card, mortgage, car loan, etc)
- Date the account was opened
- Credit limit or loan amount
- Account balance
- Payment history
Inquiries
If anyone has ever conducted a hard credit check, this may be noted on your report. As mentioned earlier, two types of inquiries include ‘soft’ and ‘hard’ inquiries. While hard inquiries may hurt your score, soft inquiries don’t have any effect on your credit score and are usually not visible to anyone except you.
Public Records
If you’ve had any bankruptcies, consumer proposals, accounts in collections, liens, or lawsuits in the past, these may be noted on your credit report and may be visible to anyone who conducts a credit check.
Soft Credit Check Vs A Hard Credit Check: Does The Type of Information That Shows Up Different?
A soft credit inquiry provides a basic summary of your credit profile and includes information such as your credit accounts, payment history, and accounts in collection.
A hard credit inquiry is more detailed and gives lenders and creditors more information to determine your creditworthiness before extending a loan to you.
Can Lenders See My Cell Phone Or Utility Bill Payments On My Credit Report?
Your credit report may outline your credit accounts, like credit cards and car loans. However, your daily bills, such as your utility bills, aren’t pulled into your report. The possible exception to this involves cell phone bills, which are typically reported if they’re postpaid contracts.
Can Lenders See My Credit Score When They Check My Credit?
Yes, lenders can see your credit score when they check your credit. When you apply for a credit product or loan, the lender may request your credit report as part of the application process. When they do, they’ll get access to your credit report and credit score.
Can Lenders See My Interest Rate And Penalties Incurred By Missed Payments?
Although your payment history on credit accounts may be listed on your credit report, certain details surrounding any penalties as a result of these missed payments may not be listed on your credit report. For instance, if you’ve been late on payments and incurred higher interest or penalty fees as a result, this information won’t be identified on your report. Instead, these details are only accessible to your creditor.
Can Lenders See Sensitive Personal Information?
As mentioned, your name, date of birth, and address may be included in your credit report. But other pieces of sensitive information will not be made available, such as your race, gender, religion, citizenship, medical history, or criminal records (except in relation to financial crime).
Can Lenders See My Old Credit Information?
Certain negative remarks may stay on your credit report for a specific amount of time. For instance, a bankruptcy may be removed from your credit report 6 to 7 years after the date of discharge, depending on the credit bureau. However, once that time has passed, this negative information will eventually fall off your credit report.
Bottom Line
Given how important your credit score is to your financial life, it’s crucial that you keep tabs on it. Maintaining good credit will help you attain the credit products you need at the rates you want. Be sure to check your credit before applying with any lender or creditor to see how you stand. You can access your credit report for free with both credit bureaus in Canada, or with other third-party sources.
