Understanding Your Credit Report and Credit Score

Understanding your credit report

• What is a credit report?
• Who can see your credit report?
• What kind of information does your credit report contain?
• How does the credit-reporting agency describe the history of your credit payments?
• What does a credit report look like?

What is a credit report?

Along with the credit histories of millions of other people, your credit history is recorded in files maintained by at least one of Canada's two major credit-reporting agencies: Equifax and TransUnion. These files are called credit reports.

A credit report is a "snapshot" of your credit history. It is one of the main tools lenders use to decide whether or not to give you credit.

Who can see your credit report?

You have the right to see your credit report. No one else can have access to the information in your report unless you allow it.

Usually, when you sign documents such as a loan or a credit card application, you are allowing the organization that is giving you credit to check your credit history. Credit-reporting agencies will only give information from your credit report to someone else when you have given permission, and when the request is related to credit, collection of a debt, rental of a house or an apartment, or an application for employment or insurance.

What kind of information does your credit report contain?

Your credit report contains information about your past and present personal and financial situation.

• Personal information: This is information such as your name, current and previous address(es), social insurance number, telephone number, date of birth, and your current and previous employer(s).
  
  
• Credit information: This is information related to any credit you may already have, such as a credit or retail card, a line of credit, a loan or a mortgage.
  
  
• Banking information: This is information about the accounts you have, including any NSF (non-sufficient funds) or "bad" cheques you may have written.
  
  
• Public records: This is any information on the public record such as a bankruptcy or a credit-related court judgment against you in a lawsuit. Secured loans, which are backed by an asset (your property for example), may also appear in your credit report.
  
  
• Collection information: This shows whether you ever had a debt that you could not pay which was referred to a collection agency for payment.
  
  
• Consumer statement: This is any statement you may have made to explain a particular situation, such as a dispute with a financial institution or a fraud warning.
  
  
• Credit report inquiries: This is a list of all of the people who have inquired about your credit: yourself, a lender, or any other authorized organization.

How does the credit-reporting agency describe the history of your credit payments?

In your credit report, credit-reporting agencies describe the history of your credit payments in a number of ways.

By rating it

• Some credit-reporting agencies report the lenders' rating of each of your credit history items on a scale of 1 to 9. A rating of "1" means you pay your bills within 30 days of the due date. A rating of "9" means that you never pay your bills at all or that you have made a consumer debt repayment proposal to the lender.
  
  
• A letter will also appear in front of the number: for example, I2, O2, R2. The letter stands for the type of the credit you are using.
  
  
  • "I" means you were given credit on an installment basis, such as for a car loan, where you borrow money once and repay it in fixed amounts, on a regular basis, for a specific period of time until the loan is paid off.
    
    
  • "O" means you have open credit such as a line of credit, where you borrow money, as needed, up to a certain limit and the total balance is due at the end of each period. This category may also include student loans, for which the money may not be owing until you are out of school.
    
    
  • "R" means you have "revolving" credit, where you make regular payments in varying amounts depending on the balance of your account, and can then borrow more money up to your credit limit. Credit cards are a good example of "revolving" credit.
    
    

By using a payment chart

• This chart shows your payment history over the last two years.
  
  

By using a payment scale

• This scale indicates the number of times you paid your bills 30, 60 or 90 days after the due date.
  

What does a credit report look like?

Below, you will find links to sample credit reports from the two Canadian credit-reporting agencies: TransUnion and Equifax. If you look at these examples carefully, you will see what kind of information a credit report contains. These examples will also help you understand your own credit report. The examples shown are for illustration purposes only.