What is credit?
A consumer’s credit is the gateway for obtaining a loan or the ability to buy items with the promise to pay it back later. Credit cards, home loans, car loans and charge cards from department stores are all obtained, or in some cases, denied, when a creditor looks at the customer’s credit history.
A credit history lists all previous borrowing experience. If the consumer had a loan and defaulted on the repayment of that loan, the credit history will report that in detail. This information is listed in the credit report. Credit history can list transactions from many years past and shadow the customer through many financial dealings. See a full list of information contained on your credit file.
The consumer should obtain a credit report before they ever need a loan. It can be a huge disappointment to try to acquire a loan for the purchase of that first home only to find out that their credit denies them the opportunity.
Why get a credit report?
Many consumers think they know exactly what is on their report. Responsible people know what dealings they have had with credit, and they are confident that the report does not have any bad credit marks because they have always paid back loans.
Others have no credit history at all. They assume that because they have had no credit dealings that there is nothing on the report. They have never had a credit card or a student loan. If the consumer is the victim of identity theft, the customer might never know there’s a problem until they try to obtain credit for a loan.
Both assumptions are right and wrong at the same time. The person with no credit, or the one with perfect credit should still obtain a credit report at least once a year. Identity theft should always be a concern. Either individual might find discrepancies in their report. Without getting a yearly report, they would never know there are false transactions on the report.
Another problem is false information from credit companies. The report might be wrong because the reporting agency made a mistake. Without seeing the report, the consumer would never know until he or she is denied credit. The individuals in these scenarios should not wait until they want to obtain a loan to look at their credit report. Credit reports can be repaired with hard work and dedication, but the consumer has to know what is on the report before having hope to fix it.
Those with bad credit usually know they have made some mistakes, paid some bills late or defaulted on a loan. Obtaining a credit report will allow them to see what is listed and make arrangements to repay the loans. Bad credit can be cleaned up before it causes a big problem with a credit rating. It does take some time, but it is completely possible to clean up bad credit.
How Canadians can obtain a truly free credit report every year
There are two agencies in Canada that provide a credit history. The major agencies are TransUnion Canada and Equifax Canada. These are the companies that creditors will contact for a customer’s credit history report. It is where the customer needs to go for their own report. The agencies only know what credit companies report to them. They list information as they receive it. If the consumer does not obtain a report and dispute inaccuracies, the agencies will not know there is a problem until it is too late.
These two agencies do not share information with each other, so it is essential to get a credit report from each agency and not to assume they have the same information. One may have a default of a store credit card when the other does not.
Once every year, consumers can get a truly free credit report from each agency. The free report is available for customers that mail a request form with two forms of identification to the TransUnion office. The form must have their name, current address, date of birth and signature. Along with the request form, the two forms of identification can be copied, and the copies sent along with the request form.
TransUnion Consumer Relations Department
P. O. Box 338, LCD1
Hamilton, ON L8L 7W2
Centre de relations aux consommateurs TransUnion
CP 1433 Succ. St-Martin
Laval, QC H7V 3P7
The form sent to the Equifax Canada office must have the name, current address, date of birth and signature of the requesting consumer. The information must match the identification that is provided with the form. The Equifax Canada application, along with copies of identification, can be sent to their office.
National Consumer Relations
P. O. Box 190 Station Jean-Talon
Montreal, Quebec H1S 2Z2
The Equifax office allows the information to be sent by fax as well. The fax number is 514-355-8502.
Both agencies will send the requested history report to the customer’s home. It takes some time when the process is done by mail. To get the free yearly report, the consumer must complete this process with the proper documentation. The credit history will be detailed but will not include a credit rating. The credit score associated with the consumer’s rating history is only available to paid requests.
To get a credit score from either agency, the consumer must pay a fee. The credit score can be obtained from the company’s Websites.
It makes sense for a consumer to obtain the free yearly report to keep an eye on their credit history and be aware of any false information as soon as possible. (Learn how to correct credit report errors) If the consumer has had previous issues with false information or is trying to clean up bad credit, obtaining a paid report along with the credit score from the agencies through their Website could be worth the expense.