For those who are new to the concept of credit, your credit report contains personal information about your credit history, as well as your credit score. It’s an essential document that lenders look at when considering your application for a loan. If you get declined, it’s usually due to the negative information or lack of information contained in this report.
Fortunately, you also have access to your credit report and it’s recommended that you check your own report regularly to verify the accuracy and ensure there are no errors. And mistakes do happen!
Learning how to read your credit file will help you spot any errors, and we’ll show you how to dispute these errors with the credit reporting agencies.
But first, you might be wondering where you can find your credit report...
How Can I Check My Credit Report for Free in Canada?
Check out websites like Borrowell.ca to get a copy of your free credit report in Canada! While a hard credit enquiry can ding your credit score, this type of inquiry won’t hurt it, and you can check it as often as you like.
How Often Should I Check My Credit Report?
The Government of Canada recommends that you check your credit report at least once every 6 months. Equifax and TransUnion have services you can use to monitor your report digitally and be alerted to strange activity, but you might have to pay for these services.
How Do I Read a Credit Report?
You’ll find an assortment of information about your financial history on your credit report. According to the Financial Consumer Agency of Canada’s Credit Report guide, you can expect to potentially find the following information:
- Types of credit you use, like credit cards, lines of credit and all types of loans (student, car, etc) and when you opened the account, how much you owe, if you made payments on time, if you missed any payments or if you ever went over your limits
- Mortgage information
- Debts that were sent to collections
- Credit inquiries from lenders over the last 3 years
- Any comments (remarks) from credit agencies or from yourself, regarding fraud issues, identity theft issues or other additional security information
- Your payment history on all credit accounts
- Any bank account information that is negative
- Any information that’s public record, like bankruptcies
You might also notice some letters and numbers on your credit report. For example, if you have an “I2” next to your car loan information, it means you’ve made a late payment.
LETTERS on your credit report
- I = Installment credit; you make regular, fixed payments (like a personal installment loan or a car loan)
- O = Open status credit; the amount you borrow is flexible but has a limit (like a cell phone account)
- R = Revolving credit; there’s a limit to how much you can borrow, your repayment varies depending on how much you owe (like a credit card)
- M = Mortgage; self-explanatory, just information on your mortgage
NUMBERS on your credit report
- 0 - Very new account OR an approved line but hasn’t been used
- 1 - Paid within 30 days of billing and paid as agreed to in terms
- 2 - Late payment of 31 to 59 days
- 3 - Late payment of 60-89 days
- 4 - Late payment of 90-119 days
- 5 - Late payment of more than 120 days but isn’t a 9 (see below)
- 7 - Making regular payments using debt consolidation, consumer proposal, credit counselling agencies, etc.
- 8 - Repossession
- 9 - Negative credit information like bad debt/sent to collection/bankruptcy
All of this information is really important when discerning why you may have been denied on your recent loan application.
What kind of errors should I look out for on my credit report?
You are entitled to file a dispute on any incorrect information your credit report, and credit bureaus are required to correct them for free. Here are some errors you should look out for:
- Mixed credit report: This is one of the most tricky problems to fix on a credit report, but thankfully they’re rare. This happens when individuals with the same name get their credit reports combined into one report. Sometimes it happens when a lender sends the wrong information to the credit agency, too. If you have a very common last name, your risk of this is higher.
- Mistakes in your personal info: Is your name, address, social insurance number, date of birth all correct? Clerical errors or identity mix-ups can happen, so make sure you double-check everything.
- Creditors failing to report credit information to bureaus: If you have relevant information that would help improve your credit rating, for example, an old credit card that you’re still using and is in good standing. Follow up with the lender to make sure they add it with the correct timeline.
- Accounts have been reported more than once: This can be especially bad if what’s being reported is a delinquent account or something in collections. Even if you don’t have anything negative in a duplication, still have it removed, because it makes it look like you have more debt than you actually do.
- Make sure your closed accounts are actually closed: If you closed a credit account, then make sure they’re listed as such by the lender. This can affect your credit score under the “utilization” category.
- Former spouse’s debts: If you’re divorced, your ex-spouse's debt can still be listed on your credit report, even if it’s not yours. Check with a lawyer if you are unsure if this is supposed to be there or not.
- Bad debts older than 7 years: Negative debt information shouldn’t be on your report after 7 years from the latest activity on the account has passed.
- Identity theft: A sign of this can be accounts that are on your report that you never opened and have a debt accruing on and is in delinquency/late payment (see above numbers list).
For even more information, check out the Government of Canada’s guide for checking errors on your credit report here.
How Do I Dispute Items on My Credit Report?
The first step in the dispute process is traditionally by mail. You’ll have to contact both credit bureaus—Equifax and TransUnion—separately. If they confirm that an error has been made, they will correct the error. Be sure to include documents in support of your dispute. These documents will not be returned to you, so only submit copies and keep the originals.
Equifax Canada Co. Consumer Relations Department
Attention: Consumer Relations
3115 Harvester Road,
Suite 201 Burlington ON L7N3N8
It takes approximately 30 days for a credit bureau to investigate a dispute. To speed up the process, you can take your case to the relevant financial institution. This tool will help you find any Canadian financial institution’s complaint-handling process. The financial institution that reported the inaccurate information might quickly accept fault on the matter and verify the correction to the credit bureaus.
If the credit bureau still does not recognise the error and you’re not satisfied, you can add a brief explanation to your credit report for free. This consumer statement provides context for the negative information and will be seen by future lenders who review your report.
If you feel like you’ve been treated unfairly by the credit bureaus you may complain in writing to your consumer affairs office.
Can I File a Credit Report Dispute Online?
TransUnion offers online dispute resolution services. This service is free of charge. Before starting the process, you need to collect any documentation that supports your claim for a correction. (i.e. marriage certificate, change of name certificate, bill payment account debits, etc.)
I Don’t Have Any Errors, but I Was Still Declined
Unfortunately, there may be no mistakes or disputed items on your credit report and you do have bad credit. Luckily, you can do something about this too. If you know your credit score and it falls in the “Average-to-Poor” category, then check out our guide on how to improve your credit score here.
I Have No Credit History. Help!
A small loan is a great way to start building your credit history. Fresh Start Finance can help!
We offer quick-and-easy installment loans (and other credit-building solutions) to help you pay your bills, consolidate debt, and get that home renovation or new car you’ve been dreaming of.
Connect with us today to see how we can help you take that first step to a better financial future.