What’s on a Credit Report in Canada?

What is on a credit report? Great question, many Canadians are asking the same thing. Countless adults in Canada are unsure of their credit score, what they would find on their credit report or how to interpret one.

Before you learn how to read a credit report or understand a credit score you first need to know what’s on one. Check Your Credit First Canada is one of few places in Canada where you can both check your credit and learn how to understand it.

While both credit bureaus in Canada offer easy to read credit reports, the truth is that they are often complicated and hard to understand for the average person. Let’s get started by going over what is on a credit report.

Information on a Credit Report in Canada

There are many parts to a credit report in Canada. Some are more important than others but each section provides information that employers, banks, finance companies and law enforcement find useful.

Your credit file contains a personal and financial profile of you that includes your identification, employment history and a detailed account of who you owe money to and how well you’re paying them.

On your Canadian credit report you will find the following information:

Personal Information – Personal information is mostly self-explanatory and includes information such as your full name, aliases, social insurance number and address. Along with your name and residence this section of your credit file also contains your employment history and previous employment history.

Credit Score (beacon score) - In Canada your credit score, also known as your beacon score, is one of the most important aspects of your credit file. Anyone with a credit history will have a beacon score between 300 and 900. The higher your credit score, the better. IMPORTANT: A credit score is only visible on a Canadian credit report if the consumer (or business) has purchased both the credit report and credit score.  When you request a free credit report in Canada you will only receive a basic report that does not include your credit score.

Credit Inquiries – Whenever you apply for a loan, someone “pulls” your credit file. This is called an inquiry and it is recorded on your credit report under the section ‘credit inquiries’. Too many inquiries can be a bad thing and can lower your credit score.

Public Records – Bankruptcies, consumer proposals, court judgements and secured loans all report under the public records section of your credit file. If someone registers a lien against you or you take out an auto loan, it will appear here.

Collection Information – If you’ve ever defaulted on a loan or skipped out on a very high cell phone or video store bill, this is where the resulting collection will be registered. If you have not paid a collection it will report as unpaid. Once you’ve settled the collection your Canadian credit report will update and label the collection paid.

Consumer Statement / Comments – Both Equifax Canada and TransUnion Canada will allow you to add a message to your credit report under this section. Most statements in this section are declarations asking that lenders contact the applicant before granting credit.

Credit Information – This is arguably the most important part of your credit report. In the credit information section of your file you will find a detailed history of your previous and current loans. Each loan has a trade line to describe its status. A credit report trade line shows the name of the lender, credit limit, balance, payment owed, start date, end date and a detailed history of how it’s been paid. If you apply for a loan, this section of your credit report tells the lender what kind of borrower you are and in most cases will be the biggest factor in their decision.

Each area of a credit file houses information that is important to your financial health, credit rating and your identity. In Canada a good credit score can be the difference between high interest and low interest rates and a secure financial identity can prevent you from being a victim of fraud.

Protected your credit and your identity by knowing what’s on your credit report. Before you apply, check your credit first!

When you check your credit report you’re not just getting a credit score, you’re getting an up close view of your credit history and the information that banks and finance companies see whenever you apply for a loan.

Reviewing your credit report gives you a major financial advantage that can help you build a better credit score and take control of your financial future!

Checking your credit report can help you:

• Understand your credit, your loan payment history and your credit capacity
• Monitor past financial activity and ensure its accuracy
• See when and where you’ve applied for credit
• Update your personal information ensuring its accurate
• Gain peace of mind
• Protect yourself from identity theft
• Identify and help correct credit problems

If thats not enough, just think of all the stories you’ve heard of people who have been victims of identity theft, had their credit damaged by someone close to them or even sued over a loan they never applied for.

When you check your Canadian credit report you get an up to date look at your credit file and all the information on it. Information really is power.

Gets the facts. Get your credit report. CLICK HERE to GET STARTED.

Remember – Before you apply, Check Your Credit First Canada.

Do you have more questions about consumer credit or credit ratings in Canada? Get answers here: Canadian Credit Questions.

Monitor your Credit in Canada

Monitoring your credit and being aware of your credit history are two of the best ways to protect yourself from identity theft in Canada.

TransUnion Canada proudly offers security and peace of mind with their Canadian Credit Monitoring service.

The TransUnions Canada Credit Monitoring program is a subscription service that offers protection, knowledge and convenience. When you subscribe to Credit Monitoring you’re getting powerful protection for your identity and credit profile.

As a Credit Monitoring member you’ll get:

• Fraud Alerts – Daily emails that notify you instantly of any changes to your credit profile, late payments, fraudulent activity, new credit inquiries and more.
• Unlimited Access – Unlimited access to your Canadian credit report, profile and score. With credit monitoring you can view your TransUnion Canada credit profile anytime and as often as you like.
• Credit Specialists – Members of the TransUnion credit program have unlimited toll free access to some of the best professionally trained credit specialists in Canada.
• Reporting Tools – Understand how your debt affects your credit with the custom debt analysis tool or use colorful charts and reports to monitor your credit progress .

Order Credit Monitoring now! Visit the TransUnion Canada link below and choose credit monitoring and get protected online – instantly.

At Check Your Credit First Canada we don’t just let you check your credit we also help you understand your credit. Get answers to your credit questions and learn how credit reporting works in Canada.

Visit our Credit Blog and Credit Questions page for more Canadian credit information.

Visit the TransUnion Canada link below to get instant access to your Canadian credit report or subscribe to credit monitoring.

TransUnion Canada

TransUnion is an international company operating for over 30 years in over 25 countries. TransUnion entered Canada in 1989. The Canadian head office for TransUnion Canada is located in Toronto Ontario.

TransUnion is one of the world’s largest and most respected credit bureaus. TransUnion offers credit reporting and credit monitoring services to thousands of consumers and business worldwide.

TransUnion Canada is a leader in credit reporting solutions and is an industry leader when it comes to business and consumer privacy and protection.

Check Your Credit First Canada is proud to work with TransUnion Canada.

For more information on TransUnion Canada and other credit bureaus in Canada please read our Credit Blog post Canadian Credit Bureaus.

Check Your Credit First Canada would like to point out that its important to know that the credit scoring system in Canada is very complex. Although a credit score plays a major role in determining if you qualify for a loan, it is not the only factor.

Other factors involved in the credit decision process include the applicants employment situation, level of income, previous credit experience, location, type of loan and total debt service ratio.

What are Credit Scores Used for For?

In Canada a credit score is used by banks and finance companies to calculate risk and prophesize the credit performance of potential borrowers.

In traditional lending circles, a credit score determines if someone will be approved for a loan and how big that loan can be.

What is a FICO Score?

FICO (Fair, Isaac and Co) is a public company that created the world’s most widely used credit scoring system: The FICO Score.

FICO scores are used by many banks, credit bureaus and finance company across the world.

How Does Credit Scoring Work?

A credit score is a complex system used to predict the risk of loan default. The formula used to generate a FICO score is said to be closely guarded and unavailable to anyone outside of FICO.

FICO will not release the exact method used to generate their score, however they have disclosed some general information:

Credit Score Factors

• Credit Balances Owed – How much outstanding credit do you have?
• Type of Credit – What type of loans do you have?
• Payment History – How well do you pay your loans?
• Credit Inquiries – How often do you apply for new credit?
• New Credit – How new are your loans and how well do you handle new credit?
• Credit Tenure – How long have you been establishing your credit?

Ready to see your credit score? Get your full Canadian Credit Report plus score – CLICK HERE.

If you’re not most people or you’re a finance professional in Canada, then you probably classify credit as either prime or subprime credit.

Get to know the differences with these prime and subprime answers from Check Your Credit First Canada:

What is Prime Credit in Canada?

Prime credit in Canada is defined as positive or strong credit. If someone has prime credit, then their credit is considered good credit.

Interest rates available to prime customers in Canada can vary but they generally revolve around the lowest rates available.

What does Prime Lending Rate mean in Canada?

While prime rate can vary from bank to bank in Canada, it is generally the best interest rate available.

Depending on the bank and the type of loan, a preferred customer (a customer with good credit) could be charged straight prime or prime + or prime – a specific amount of interest.

What is Sub Prime Credit in Canada?

In Canada subprime credit, also known as non prime credit, is defined as poor or bad credit. Because the word sub means below, subprime describes below prime credit or credit that is beneath prime.

Subprime interest rates in Canada can range from slightly above prime interest rates to very high interest rates.

The level of subprime credit in Canada and The United States is on the rise. This is a combination of an increased number of consumers defaulting on their loans, a rise in Canadian bankruptcies and the financial industries reaction to a recent recession in Canada.

Find out if you have prime credit or to check if your credit is subprime, check your Canadian credit report and credit score now – CLICK HERE.

What is a Trade Line?

In Canada a trade line represents any credit account you have, open or closed that reports to the credit bureau. Loans report as trade lines and trade lines report loan information.

A trade line details the type of loan, size of the loan, loan balance, credit limit, loan payment history and more. Trade lines are often the most telling part of a person’s credit file. Many finance institutes look to trade lines to interpret a debtors “story” or credit history.

There are two types of trade lines: Revolving trade lines and installment trade lines.

What’s the Difference Between an Installment Loan and a Revolving Loan?

Installment Loans in Canada

An installment loan has terms with a repayment schedule that requires a regular fixed payment. The amount owed each month on an installment loan never changes.

Installment loans report to the credit bureau as I, for example an up to date installment loan would report as I1.

A good example of an installment loan in Canada is an auto loan. Auto loans have a fixed term and fixed payment amount.

Revolving Loans in Canada

Revolving loans have a credit limit with payment terms that can vary. The payment owed on a revolving loan “revolves” around the balance of the loan. The balance of a revolving loan is based on how often it is used and for how much.

A credit card is a good example of a revolving loan. A credit card has a credit limit and depending on often much it is used, the balance may vary. Most credit cards in Canada require a minimum monthly payment of 3% of the credit cards balance.

How Does Bad Credit Report to the Credit Bureau?

Bad credit in Canada reports to credit bureaus in different ways.

The most obvious way bad or past due credit reports to your credit file is by updating the status of your trade lines from up to date, to past due.

Loan trade lines report with a lettered and numbered credit rating. Trade line ratings report from 0 – 9, with 0 being “new with no history”, 1 being up to date and 9 being “write off”.

Here are some examples of trade lines reporting poorly in Canada:

• Payments that are 30 days late report as R2 or I2
• Payments 60 days late report as R3 or I3
• 90 day late payments report as R4 or I4
• 120 day late payments report as R5 or I5
• Written off credit reports as R9 or I9 (credit trade line write off)
• An I8 trade line represents a car loan repossession (vehicle repo)

Do Collections Report to the Credit Bureau?

Yes. Both paid and unpaid collections report to the credit bureau. A Canadian credit report has a special section dedicated to any collections reporting.

Does Bankruptcy Report on Credit Files?

Yes. Bankruptcy and consumer proposal are both reported to credit bureaus. A consumer with a bankruptcy or previous bankruptcy will have the following bankruptcy information visible on their credit report:

• Trustee in Bankruptcy (The name of trustee that filed your bankruptcy)
• Size of the bankruptcy liability
• Dollar amount of assets included in the bankruptcy
• Date the bankruptcy was filed
• Date the bankruptcy was discharged

Does Bad Credit Lower my Credit Score?

There are a number of ways your credit score can take a hit in Canada and having bad credit is one of them. When a creditor reports a payment 30 days late or more, your credit rating on that trade line will change to match its current past due status. This affects your credit score negatively.

What is a Credit Report?

A credit report in Canada acts as a report card for your credit repayment history. The basic function of a credit report is to detail how well you handle your financial responsibilities and pay back your creditors.

How Do You Open a Credit File in Canada?

Credit reports (or credit files) are opened when you first apply for credit. Any time you fill out a credit application in Canada the information you provide is used to either open your credit file (the first time you apply) or update your credit file.

How Does Credit Reporting Work?

Every time a person applies for credit or a month elapses while they have active credit, information is transmitted from the source (the creditor holding the loan or the financial institute submitting the credit application) to the credit bureaus in Canada, who then update that persons credit file.

The process outlined above is a basic way of describing how credit reporting works in Canada.

Do All Loans Report to the Credit Bureau in Canada?

Most loans in Canada report to the two Canadian credit bureaus. There are however certain types of loans that do not report to the credit bureau. Non reporting loans are typically in house loans, private loans, small loans or utility loans.

The types of loans in Canada that don’t always report to the credit bureau are:

• Cable & Mobile Contracts – Cell phone and cable contracts (such as Rogers mobility or Rogers cable) don’t always report to both credit bureaus until there is a payment problem.
• Mortgages – A mortgage in Canada will usually show as a secured or loan registered loan, however they sometimes don’t appear on a credit bureau as a mortgage trade line.
• In House Auto Financing – Some car dealerships offer their own financing. This is often referred to as in house leasing or in house financing. While a lot of these financing dealers report their loans to credit bureaus, many do not. This can have an adverse affect on a person’s credit rating if they are trying to establish credit.
• Private Loans – Most private loans do not report to the credit bureau.

Which Creditors Report to Credit Bureaus in Canada?

Almost all major creditors in Canada report to both credit bureaus. These major Canadian creditors include, but are not limited to:

• All major credit card companies (Visa, Mastercard and American Express)
• Retail Creditors (Futureshop, Canadian Tire, HBC and Sears)
• All major Canadian banks
• Most credit unions
• Auto lenders & leasing companies
• Manufacturer auto lenders

If you want to check your Canadian credit report online go to Check Your Credit right now!

FACT - There is no secret to increase your credit score in Canada. Sorry to break it to you but any company claiming otherwise is being dishonest. There are, however, steps you can take to increase your chances of credit recovery and improve your credit score.

Here are some real ways you can take action and help improve your credit score:

Pay your bills

The most important part of building credit and maintaining a healthy credit score is making payments on time. If you pay your loans as they become do, then you will strengthen and improve you credit score.

Establish credit

In order to have a credit score, you need to have a credit file. You cannot improve your credit score if you don’t have one. So if you have no history of credit, its time to get some. Start small and apply for a credit card. Each payment you make will help you establish credit.

Pay off collections

When you write off bad debt, creditors and collection agencies file collections against you. In Canada these collections appear on your credit report as unpaid collections and can lower your credit score. If you check your credit report and find a collection on your bureau, pay it off immediately.

Reduce credit balances

Maintaining a healthy amount of credit can be good for your credit rating but too much credit or too high balances can be a bad thing. If you can afford to, don’t just pay your minimum monthly payments – try and pay off your entire balance each month.

Limit credit applications

Each time you apply for a loan your credit file is pulled and a credit inquiry is noted on your report. While occasional credit inquiries are not that bad for you, a high level of inquiries can hurt your credit score in Canada. If a bank or finance company reviews your credit report and sees a lot of inquiries they could label you a credit seeker and decline your application. The logic used here is this: If you are actively seeking a lot of credit, then eventually you will amass so much credit, you will begin to struggle and miss payments or worse.

Avoid bankruptcy

Bankruptcy and past bankruptcies in Canada can hurt your credit rating. If you have an opportunity to avoid bankruptcy, take it.

Limit credit trade lines

Having too much of a good thing can be bad. That saying especially applies to credit. Having too much credit can be considered a risk, even if you are paying it on time. Many finance companies see significant risk in applicants who have a lot of available credit. Try and limit how much credit you have by closing unused credit cards or lowering your credit limits.

Stay within credit limits

If you have revolving credit such as a credit card or line of credit, it’s important to always stay within your credit limit. The higher your balance the more it affects your credit score. Exceeding your credit limit is bad for your credit. If you are over capacity, your credit report will make sure other lenders and banks know it.

Rebuild credit

If you have a bad credit history, previous loan write off or a bankruptcy then you probably have a low credit score. While paying off bad debts and collections is very important, re-establish credit history is also important. Getting approved on a new credit card, after bankruptcy auto loan or another type of loan can be the first step in a series of credit repairing steps. Once you obtain new credit you must pay it on time, every time. Eventually you will begin to see the benefits.

Check Your Credit First Canada is dedicated to helping you understand your credit report and credit score. If you’re ready to get your Canadian credit report then Check Your Credit now!

Want to protect your identity? Identity theft in Canada can be a serious problem. The best defense is credit awareness. Subscribe to Credit Monitoring and gain priceless peace of mind.

If you want to know more about consumer credit in Canada visit our Credit Questions page and Credit Blog. Thank you and come back soon for more free credit education.