Credit report and score basics

Your credit report

Your credit report is a summary of your credit history.

Your credit report is created when you borrow money or apply for credit for the first time. Lenders send information about your accounts to the credit bureaus, also known as credit reporting agencies.

Your credit score

Your credit score is a three-digit number that comes from the information in your credit report. It shows how well you manage credit and how risky it would be for a lender to lend you money.

Your credit score is calculated using a formula based on your credit report.

Note that you:

Your credit score will change over time as your credit report is updated.

How a credit score is calculated

It’s impossible to know exactly how much your credit score will change based on the actions you take. Credit bureaus and lenders don’t share the actual formulas they use to calculate credit scores.

Factors that may affect your credit score include:

Lenders set their own guidelines on the minimum credit score you need for them to lend you money.

If you have a good credit score, you may be able to negotiate lower interest rates. However, when you order your credit score, it may be different from the score produced for a lender. This is because a lender may give more weight to certain information when calculating your credit score.

Who creates your credit report and credit score

There are two main credit bureaus in Canada:

These are private companies that collect, store and share information about how you use credit.

Equifax and TransUnion only collect information from creditors about your financial experiences in Canada.

Some financial institutions may be willing to recognize a credit history outside Canada if you ask them. This may involve extra steps. For example, you may request a copy of your credit report in the other country and meet with your local branch officer.

Who can see and use your credit report

Credit bureaus follow rules that define who can see your credit report and how they can use it.

Those allowed to see your credit report include:

These businesses or individuals use your credit report to help them make decisions about you.

These decisions could be to:

A lender or other organization may ask to “check your credit” or “pull your report". When they do so, they are asking to access your credit report at the credit bureau. This results in an inquiry in your credit report.

Lenders may be concerned if there are too many credit checks, or inquiries in your credit report.

It can seem like you're:

Consent and credit checks

In general, you need to give permission, or your consent, for a business or individual to use your credit report.

In the following provinces a business or individual only needs to tell you that they are checking your credit report:

Other provinces require written consent to check your credit report. 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 for credit. They can also access your credit at any time afterward while your account is open.

In many cases, your consent also lets the lender share information about you with the credit bureaus. This is only the case if the lender approves your application.

Some provincial laws allow government representatives to see parts of your credit report without your consent. This includes judges and police.

Contact your provincial or territorial consumer affairs office for information on laws related to credit reporting.

What's included in your credit report

Your credit report contains personal, financial and credit history information. In general, it takes 30 to 90 days for information to be updated in your credit report.

Personal information in your credit report

Your credit report may contain your:

Financial information in your credit report

Your credit report may contain:

Your credit report contains factual information about your credit cards and loans, such as:

Your credit report can also include chequing and savings accounts that are closed “for cause”. These include accounts closed due to money owing or fraud committed by the account holder.

Other accounts included in a credit report

Your mobile phone and internet provider may report your accounts to your credit bureau. They can appear in your credit report, even though they aren’t credit accounts.

Your mortgage information and your mortgage payment history may also appear in your credit report. The credit bureaus decides if they use this information when they determine your credit score

A home equity line of credit (HELOC) that is added to your mortgage may be treated as part of your mortgage in your credit report. If your HELOC is a separate account from your mortgage, it is reported separately.

Why your credit history matters

It can affect your finances

Financial institutions look at your credit report and credit score to decide if they will lend you money. They also use them to determine how much interest they will charge you to borrow money.

If you have no credit history or a poor credit history, it could be harder for you to get a credit card, loan or mortgage. It could even affect your ability to rent a house or apartment or get hired for a job.

If you have good credit history, you may be able to get a lower interest rate on loans. This can save you a lot of money over time.

It can show signs of identity theft

You can also use your credit report to check for signs of identity theft. This is something you should do at least once a year for both credit bureaus. Look to make sure someone has not tried to open credit cards or other loans in your name.

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