A Primer to Credit Scores and Reports

Keeping tabs on your credit report and score is a good idea not only so you can make sure there are no mistakes on you file, but also so you can see how lenders see you, and be armed with that information when going into any negotiations.

Essentially, you credit report is a history of how you have used credit (cards, students loans, line of credit etc.) and how you have repaid it (on time, over 30 days late, in default or receivership etc).  Your credit score is a number between 300 and 900 (in Canada) that reflects all the information in your report.

There are currently two agencies in Canada that track this information: Equifax and Transunion. They get their information from the places you have a credit history.

You can obtain a free copy of your credit report by requesting in writing. Simply fill out the request application for each agency and mail it in. This free report will have all the information regarding your credit history… what cards you have, what student loans etc., and how you have repaid those loans.  To obtain your credit score, you will have to pay about $30 to each agency. When you order this, your updated report comes with it.

Be careful of one thing should you order your report and score: be sure to order the one time report. Both companies have an option whereby you pay a monthly fee of about $15 per month to have constant access to your file and score. There is absolutely no need for this. Ordering your report and score once a year from each company will suffice, and will only cost about $60.

I’m in the habit of ordering a free credit report in June, and ordering a full report and score in December. It allows me to check for any incorrect information that may be affecting me, and it also allows me to track my credit history.

While ordering or inquiring into your own file doesn’t affect your score, having many lenders looking at your score will lower it. By having a recent copy of your report and score printed out, you can bring that to lenders to talk about ball park numbers without affecting your score, and then have them check your official report once negotiations start to solidify.

An excellent place to start if you are new to credit reports and scores is this Government of Canada website. It is also in my sidebar under resources (Understanding Your Credit Report) should you need it in the future.


One response to “A Primer to Credit Scores and Reports

  1. Pingback: Obtaining Your Canadian Credit Score | In Search of Salt

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