Credit scores are an important financial tool for many lenders when approving consumers for credit. In Canada, there are two credit bureaus; TransUnion and Equifax, that compile consumer credit information and provide it to banks and other lenders so that they may assess their client’s creditworthiness.
A credit bureau (sometimes referred to as a credit reporting agency) is a company that compiles information about how individuals handle their credit products and debts. Credit companies, lenders, and banks provide credit reporting agencies with this information and then the credit bureaus create a credit report for each individual.
Credit bureaus will then provide this credit report to the individual it belongs to, or to a lender or some other third party requesting access. Credit reports serve as a risk management tool to help determine an individual’s creditworthiness.
Yes, while credit bureaus are not government-run, they are regulated by federal and provincial law. The Personal Information Protection and Electronic Documents Act (“PIPEDA”) is the federal legislation credit bureaus must follow to protect consumer information. Most provinces also have extra legislations to further protect consumers and their credit information.
As already mentioned, credit bureaus are responsible for collecting credit info on consumers that lenders and creditors would be interested in when consumers apply for a loan or credit. All the information they gather is collected into a neat little package in the form of a credit report.
As we discussed above, credit bureaus provide consumers, lenders, and creditors with credit reports, a file that contains information concerning an individual’s credit habits and history. Aside from this, they also offer other credit information tools and services.
When you open up a credit account, your lender or creditor will report your credit activity to either one or both credit bureaus. In some cases, such as payday loans, lenders won’t report to either. Your credit activity 30 days to the credit bureaus who then use that information to create and update your credit report.
Once a credit file is opened in your name, other potential creditors and lenders can now request to see your credit report to help them assess whether you’re a creditworthy person.
The type of information that is reported to the credit bureaus includes:
TransUnion and Equifax both get their information from creditors and lenders that consumers deal with. So, any creditors that you have dealt with in the past will be the ones reporting their information to the credit bureaus. More specifically, your payment history and account status are provided to credit bureaus, as these are the two more important factors that influence your credit report and scores.
That said, not all lenders and creditors report information to the credit bureaus, which means both entities might have different information. In addition, each credit bureau might have its own credit scoring model that they follow that calculates your credit scores. As such, your credit scores could vary between the credit bureaus.
Lenders and banks usually request access to the information collected by credit bureaus to make lending decisions. But there are other entities that are also interested in the information that the credit bureaus may have, including:
Essentially, any company that has a valid reason to get a copy of your credit report may do so, however, they must get your permission.
It’s important to review your credit report regularly in order to see where you stand as far as your credit is concerned. You can use your credit report to:
| Cost | Credit Score | Credit Report | ||
 | Free | Yes | Yes | Visit Site |
 | Free | Yes | No | Visit Site |
 | Free | Yes | Yes | Visit Site |
 | Free | Yes | Yes | - |
Your credit report is important, and the credit bureaus in Canada are the places to go to obtain this critical credit profile. If you’re looking to apply for a loan in the near future, the information contained in this report will play a key role in whether or not you can get approved. If you’re looking to improve your credit score or want to apply for a loan, let Loans Canada help. Get in touch with us today.
Lisa has been working as a personal finance writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same.
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