Credit Reports
A credit report is a history of how consistently you pay your financial obligations. It is created when you first borrow money or apply for credit and is built over time.
The companies that lend and collect money or issue credit cards (banks, finance companies, credit unions, retailers, etc.) send credit reporting agencies specific and factual information about their financial relationship with you. Details, such as when you opened up your account, timeliness of your payments and whether you have gone over your credit limit are shown in full. Because this information is confidential, you have the right to see your report and only disclose it to those you choose.
Checking your Credit History
Typically, when you apply for a loan, a credit card or even a mortgage, you will need to allow an organization to check your credit history.
There are many ways to order your credit report, such as by phone or fax. The easiest and safest method is by internet through a credit-reporting agency such as Equifax or TransUnion Canada.
The credit report summarizes information about the different types of accounts you have. It will include the following account types:
- Revolving accounts, like credit cards and lines of credit
- Installment accounts, like loans
- Other accounts, eg: cell phone
- Collection accounts
Tips to Improve your Score
When you receive your credit score it’s important to make sure that the information in the report is correct.
If the score is lower than you expected, carefully reading the report will help you determine which factors are having a negative influence on your score. The following tips will help you improve your credit score:
- Make sure you have a credit history: you may not have a score because you do not have a record of owing money and paying it back. One way to build a credit history is by using a credit card.
- Always pay your bills on time
- Don’t go over 50% of the credit limit on your credit card
- Apply for credit in moderation