Reading your credit report and understanding the contents within it is important for understanding your financial health and identifying any signs of fraud. In your credit report are notes about various aspects of your credit history, including the accounts you have open, your payment history, and public records you may have on record. This information all plays a role in the strength of your credit score.
Read on to find out how to read a credit report to gain a full understanding of your credit profile.
Key Points
- Knowing how to read your credit report will help you understand what your credit profile is like, what lenders see when they review your report, and how to spot inaccuracies.
- The information in your credit report directly impacts your credit score.
- Credit reports are regularly updated, so the information on them may also change.
- If you notice any errors on your credit reports, have them fixed right away.
How To Read Your Credit Report In Canada
Canada has two major credit bureaus: Equifax and TransUnion. They each have their own systems for compiling your information, and some creditors may report to both, while others may only report to one.
That said, you can expect your credit reports to contain the following personal and financial information:
Personal Information
The following personal information may be found on your credit reports:
- Full name
- Date of birth
- Current and any previous addresses you lived at
- Current and previous telephone numbers
- Current and previous employers
- Social Insurance Number (SIN)
- Information about your driver’s license
- Passport number (if you have one)
Financial Information
Information about your finances and credit profile will be included in your credit reports, including the following:
Credit History And Account Information
Your credit report will generally contain details of your credit accounts, such as credit cards, retail or store cards, lines of credit, personal loans, and in some cases your cell phone or internet accounts. Information on each account may include details about the dates the accounts were opened or closed, and payments to creditors.
Negative Banking Information
Your credit report may contain negative remarks, such as missed payments, closed accounts with delinquencies, bad cheques, non-sufficient funds (NSFs), collection accounts, charge-offs, and bankruptcies. These remarks may remain on your credit report for at least 6 years, though the length can vary by credit bureau and type of negative remark.
Public Records
Your report may also detail any public records you’ve experienced, such as bankruptcies, legal judgments, and liens.
Consumer Statements
If you’ve ever had a conflict and the investigation did not resolve this issue, you have the right to add a short statement to your credit file, free of charge, explaining your side of the issue. That way, when a lender or creditor pulls your credit report, they will be able to see the note.
Credit Inquiries
Hard checks or inquiries are recorded on your credit report and may decrease your credit scores by a few points. A hard credit check occurs when a creditor pulls your report after you apply for a loan or credit product. Soft inquiries may also be included in your credit report, but are not visible to anyone but you.
Positive vs. Negative Records On Your Credit Report
Your credit report may contain a list of both positive and negative records. So, what’s the difference?
Negative Records
Negative records include payments that were either late, not made in full, or were not paid at all. These remarks can stay on your report for up to 7 years.
Positive Records
Positive records include accounts in which payments were on time and in full, with no NSFs or bad cheques. These items have a positive effect on your credit score and can stay on your credit report for up to 20 years.
How Are Your Debts Rated On Your Credit Report?
When your creditors and lenders send your information to the credit bureaus, each account is identified with a number and letter. Here’s what they mean:
Letters Stand For The Type Of Account
| Installment (I) | You pay back your loan in fixed installments until the loan is paid off in full. Examples of this type of account are car loans or personal loans. |
| Open status (O) | You can borrow money when needed, up to a certain limit. A line of credit will show up as an open status account on your credit report. |
| Revolving (R) | You can borrow specific amounts of money up until you’ve researched your limit; your payments fluctuate depending on how much you’ve borrowed. A credit card is an example of revolving credit. |
| Mortgage (M) | Mortgages do not always show up on credit reports; it depends on the credit reporting agency. |
Numbers Represent A Rating
| 0 | Account is too new to rate, not yet used. |
| 1 | Paid off within the agreed time limit. |
| 2 | Late payment, 31 – 59 days late. |
| 3 | Late payment, 60 – 89 days late. |
| 4 | Late payment, 90 – 119 days late. |
| 5 | Late payment, more than 120 days late. |
| 6 | Not used. |
| 7 | Account is currently in consolidation, consumer proposal, or debt management program. |
| 8 | Repossession. |
| 9 | Bad debt, accounts that have been sent to collections or are in bankruptcy. |
Each credit account you have opened will have a code assigned to it, including a number and letter. Anyone who pulls your credit report can tell what type of credit you currently have and its standing.
What Happens If I Spot Errors On My Credit Report?
If you find mistakes on your credit report, have them fixed or removed from your credit report immediately. Inaccuracies on your credit report can hurt your credit score, so they must be dealt with quickly.
You can dispute items on your credit report with the credit bureaus:
Equifax
You can dispute an error with Equifax by sending your dispute form in the following ways:
- Online
- By mail
TransUnion
You can dispute an inaccuracy with TransUnion in the following ways:
- Online through TransUnion’s online portal.
- By calling 1-800-663-9980 (for English service) or 514-335-0374 (for French service).
- By mail a completed Investigation Request Form
Can I Check My Credit Report For Free In Canada?
You can access your credit report for free from both Equifax and TransUnion. The bureaus update their reports monthly.
You can also check your credit score with both Equifax and TransUnion. Equifax provides credit scores for free, while TransUnion charges a monthly subscription fee for Canadians to access their credit scores and Consumer Disclosure reports. The exception is in Quebec, where residents can check their TransUnion credit score for free.
Who Can See Your Credit Report In Canada?
Several entities can see your credit report, including the following.
Lenders And Creditors
When you apply for new credit, the lender will ask to pull your credit report to verify your creditworthiness. This is considered a “hard credit check”, which can have a negative impact on your credit score. A hard credit check typically requires your consent to be performed.
Employers
Some employers may ask to see your credit report when you apply for a job, particularly those in the financial industry.
Landlords
When you apply for a lease, the landlord may request your credit report as a way to determine how likely you’ll be to make your rent payments on time every month.
Collection Agencies
If you have accounts in default, your creditors may sell your debt to a collection agency. These agencies may check your credit report as a way to find you once they take over the debt collection.
Government Agencies
Some government agencies may check your credit report for various reasons, such as when you apply for government benefits or as part of an investigation on you.
Insurance Companies
If you’re taking out some type of insurance policy, the insurance provider may request to see your credit information. They’ll use this information as a way to determine your coverage amount and the premium price to charge you.
You
You’re allowed to check your credit report. In fact, it’s recommended that you do this as a way to monitor your credit health and spot any errors and suspicious activity. Checking your own credit report won’t hurt your credit score.
Final Thoughts
Now that you have a better understanding of how to read your credit report, be sure to check it regularly. Lenders and other organizations use credit reports to assess your creditworthiness. The more positive your credit report is, the better your credit scores will likely be, which will help you access different types of credit products.
