how to rebuild my creditHow to Check & Monitor My Credit Score. Part of achieving financial wellness is knowing your credit score. Understanding where you are in your score lets you know the best steps to take to maintain (or move to) an excellent credit score and better financial health. You probably think school and perhaps work are the only places where you will be graded and scored for performance. Not true. We go through life being scored and graded for our financial performance. It’s called a credit score. It affects our life more than we may realize.

People’s daily lives are closely associated with credit scores in Canada. Many countries, such as Canada, have sophisticated credit systems in place. Such a credit system will determine whether your bank will approve a loan or whether you will land an apartment or a job that you want. Keeping excellent credit scores in Canada is crucial to everyone’s daily life. Tracking your credit score closely can help you catch any surprises in your credit before they come. Let’s look at how to check and monitor your credit score, so you’ll know where you stand.

What is a credit score?

A credit score is a number expressing your credit information at one point. It indicates the risk you represent for lenders, compared with other consumers, on a scale from 300 to 900. High scores on this scale are good. The higher your score is, the lower the risk for the lender.

You can read our blog post on what makes up a credit score and how to improve your credit score. Learn the factors that impact your credit score. Get to know the average credit score by age group, the credit score ranges, and strategies to boost your credit.

What is a credit report?

A credit report is a report based on your credit history. It’s a summary of how you pay your financial obligations that contains information based on what you have done in the past. It is one of the main tools lenders use to decide whether or not to give you credit. Some of the information on your credit report is used to determine your credit score.

How to Check & Monitor My Credit Score

There are two main credit bureaus in Canada: Equifax and TransUnion. These are private companies that keep track of how you use your credit. They assess public records and information from lenders like banks, collection agencies, and credit card issuers to determine your credit score. Once a year, you can request a copy of your credit report by mail for free though if you want instant results online, it’ll cost you. There is a fee.

There are five steps to checking your credit report:

CHOOSE YOUR CREDIT BUREAU

Under Canadian Law, you are entitled to a free copy of your credit report once a year. There are two national credit bureaus in Canada: Equifax Canada and TransUnion Canada. Hence, which credit bureau should you choose? Well, you should check with both bureaus.

Score providers, such as the credit bureaus Equifax and TransUnion, use different kinds of credit scoring models and may use various information to calculate credit scores. Credit scores provided by the two nationwide credit bureaus may also vary because some lenders may report information to both, one or none. And lenders and creditors may use additional information, other than credit scores, to decide whether to grant you credit. Therefore, we recommend you get a copy of your credit report from both bureaus. To make sure you are well-informed before you secure a loan.

Requesting your credit report does not affect your credit score. However, be careful of some websites. Many sites are scams. Some credible third-party websites are Borrowell and Bankrate.

PROVIDE YOUR IDENTIFICATION

There are two options for getting your credit report. You can get one for free, or you can pay for instant results. Let’s look at the type of identification you need for both options.

For free credit report

  1. Make your request using the forms provided by the two credit bureaus, Credit Report Request Form (Equifax) and the Consumer Disclosure Request Form (Transunion).
  2. Provide copies of two pieces of acceptable identification, such as a driver’s license or passport. If your address is not up-to-date on either one of that identification, you can use a bank statement or telephone bill. The credit bureaus recommend you black out transactional details.
  3. Fill out the form with your contact information.
  4. You choose whether or not you want to include your SIN, but we recommend you provide it. This allows the bureaus to cross reference your information which prevents delays and confusion. Ultimately speeding up the process.
  5. Send your completed form and proof of identity in a securely sealed envelope by mail or fax to the provided address.
  6. You should receive your report within five to ten days!

For paid credit report

You can pay to obtain an instant copy of your credit report by visiting Equifax or TransUnion. Both websites charge a fee for instant access to your credit report and credit score. If you decide to pay for your credit report, you’ll follow the same process as the free report but with this extra step: Include your credit card information at the bottom of the Credit Report Request Form. 

If you have had good credit for several years, always pay your bills on time, use less than 75% of your credit limits, and haven’t applied for a lot of credit recently, then you don’t need to waste money to find out your credit score; it will be good. Hence, if you suspect your credit isn’t as good as it should be and are planning to apply for credit. Then, you might want to pay to find out your credit score.

DECIDE HOW TO RECEIVE YOUR CREDIT REPORT

There are three ways you can receive your credit report.

  1. Order by mail. It’s either filling out the online form explained in the previous step or requesting it over the phone. You’ll need to confirm your identity by answering personal and financial questions. Then you’ll receive the credit report in your mail within 1-2 weeks.
  2. Get your credit report in person. Both credit bureaus allow you to request your free credit report in person. You’ll need to visit one of their locations and bring at least two pieces of identification. Learn more about requesting a free Equifax credit report in personLearn more about requesting a free TransUnion credit report in person
  3. Order online. This is arguably the most convenient avenue because you’ll have immediate access to your credit report (though there is a fee for it). 

UNDERSTAND YOUR CREDIT REPORT

The major credit bureaus refer to credit reports in different ways.

Equifax refers to your credit report as credit file disclosure.

TransUnion refers to your credit report as a consumer disclosure.

Lenders use codes to send information to the credit bureaus about how and when you make your payments. You may see a different code on your credit report depending on how you make your payments for each account.

These codes have two parts.

A letter shows the type of credit you’re using

A number shows when you make payments

Once you receive a copy of your credit report, it will contain explanations to help you understand the details of your credit report. It should also let you know how to correct mistakes or dispute information you think is incorrect. The Government of Canada has also published a guide called, Understanding Your Credit Report and Credit Score to help Canadians understand how the credit reporting system works in Canada. It contains all sorts of helpful information. Including how long information stays on your credit report.

MONITOR YOUR CREDIT SCORE MONTHLY

Canada’s credit bureaus, credit card issuers, and financial institutions offer credit monitoring services. These services will notify you after updates are made to your credit report and credit score, such as a credit inquiry. You may consider using this service if you think you’ve been a victim of fraud or affected by a data breach. This can help you see if somebody is trying to apply for credit in your name. However, you won’t be able to stop it from happening.

You usually need to pay for these services. Some institutions may offer it for free under certain conditions. It’s your personal decision whether you feel these services are worth the money. The bottom line is you can always check your credit report for free by mail. Or, you can pay to get it online whenever you want. If you have been the victim of identity theft or are worried that you may be susceptible to ID theft, you may consider the expense worthwhile.  

FINAL THOUGHTS

Reviewing your reports can help ensure your credit profile contains accurate information. It can help you catch and correct any errors affecting your credit negatively. We hope the information provided above can be beneficial for you.

On the other hand, if you want to finance a vehicle, we can assist. Regardless of your credit score, we can get your financing set up and approved immediately. We can also help rebuild and improve your credit score. Get pre-approved here today! Here at Edmonton Auto Loans, you are on the right hand.

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