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Credit report and score basics
Credit reporting agencies are private companies that collect, store and share information about how you use credit. An agency is also called a “credit bureau” or just a “bureau.”
These agencies are governed by regulations that cover many parts of their business, such as who is allowed to see your credit report and what it can be used for.
In Canada, there are two main credit reporting agencies: Equifax Canada and TransUnion Canada.
These agencies sell credit reports to their members, which include banks, credit unions and other financial institutions, credit card companies, auto leasing companies and retailers. These businesses use your credit report to help them make their decisions about you.
Other organizations also use it to check your use of credit and personal trustworthiness. Those allowed to use your credit report include mobile phone companies, insurance companies, governments, employers and landlords.
When a lender or other organization “checks your credit” or “pulls your report,” it is accessing your credit report at the credit reporting agency. This is usually recorded on your credit report as an “inquiry.”
Lenders provide the information in your credit report to the credit reporting agencies. Other sources of information include collection agencies, offices that handle child support and public records filed with courthouses.
Take credit for your actions!
Do you have a strong credit score? Use this to your advantage when you negotiate for a loan. Point out that you represent a lower risk to the lender and ask for a lower interest rate or better terms.
There are regulations in place to protect your personal information, including your credit report. Usually, your credit report can only be used to:
- lend money or extend credit to you
- collect on a debt you owe
- consider you for rental housing or for a job
- provide you with insurance (some provinces have restrictions)
- meet a direct business need.
Lenders, employers or landlords can only use your credit report when you give your consent or, in some provinces (including Nova Scotia, Ontario, Quebec, Prince Edward Island and Saskatchewan), after they tell you they will be checking your report.
Usually, when you sign an application for credit, you allow the lender to access your credit report. Your consent generally lets the lender use your credit report when you first apply and anytime afterward while your account is open.
In many cases, your consent also lets the lender share information about you with the credit reporting agencies if your application is approved.
Some provincial laws permit government representatives, including judges and police, to see parts of your credit report without your consent.
In some provinces, your credit score cannot be used to decide whether you qualify for insurance or to determine how much you will be charged for insurance coverage. In some cases, insurers are not allowed to use your credit score when deciding whether to offer you specific types of coverage, such as auto or mortgage insurance.
Some provinces require lenders and others to tell you if your credit report led to you being refused for a benefit or service, or if you have to pay more for it.
For more information about provincial and territorial laws, contact the government office that handles consumer affairs in your area.