Credit report and score basics
Learn about your credit report and credit history. Learn about your credit score and how to manage your credit.
Lenders use your credit report and score to decide if they’ll lend you money and at what interest rate.
Your credit report and how it works
Your credit report is a summary of how you’ve used credit in the past (your credit history). Credit bureaus, also called "credit reporting agencies" create your credit report when you first borrow money or apply for credit.
It includes details about:
- your credit cards, loans and mortgages
- how much you owe
- if you make payments on time or not
Lenders send information about your credit accounts to credit bureaus.
Your credit report helps other lenders decide if they can trust you to repay money. It affects your ability to get a credit card, loan, mortgage or even rent a home.
What’s included on your credit report
Your credit report contains personal, financial and credit history information. Credit bureaus update your credit report at least once per month.
Personal information on your credit report
Your credit report may include your:
- name
- date of birth
- current and previous addresses
- current and previous telephone numbers
- social insurance number (SIN)
- driver’s licence number
- passport number
- current and previous employers
- current and previous job titles
Financial information on your credit report
Your credit report may include financial information such as:
- credit you use, including credit cards, loans, lines of credit or retails cards
- non-sufficient funds (NSF) payments or bad cheques
- bankruptcy or court decisions related to your credit
- debts sent to collection agencies
- inquiries from lenders who requested your credit report in the last 3 years
- registered items, like a lien on a car that lets the lender seize it if you don't pay
- notes such as consumer statements, fraud alerts and identity verification alerts
For each credit card and loan, your credit report may include:
- when you opened your account
- how much you owe
- if you make your payments on time or miss payments
- if your lender sends your debt to a collection agency
- if you go over your credit limit
Accounts closed for cause may also appear on your credit report. For example, chequing or savings accounts closed because of money owing or fraud.
Other accounts on your credit report
Credit bureaus may include other accounts on your credit report.
Your credit report may include:
- phone, internet or utility accounts
- mortgage information
- mortgage payment history
- home equity lines of credit (HELOCs), which may appear as:
- part of your mortgage
- a separate account
Learn how long information stays on your credit report.
Your credit score and how it’s used
Your credit score is a 3-digit number that comes from your credit report. It shows how likely you are to repay money you borrow.
Lenders use it to decide how risky it is to lend money to you. They sometimes call this your creditworthiness.
Your credit score changes over time as lenders update your credit history.
Your score:
- goes up when you pay bills on time and use credit responsibly
- goes down when you miss payments or have too much debt
Scores usually range from 300 to 900. A higher score is better.
What affects your credit score
Credit bureaus and lenders use different formulas to calculate your score, but they don’t share the exact details.
However, there are common factors that affect your score. These include:
- your credit history:
- how long you’ve had credit
- how long each account has been on your credit report
- the types of credit you use
- if your debts were sent to a collection agency
- if you’ve ever filed for insolvency or bankruptcy
- your credit habits:
- if you carry a balance on your credit cards
- if you miss payments
- how much debt you owe
- if you're close to or over your credit limit
- how often you apply for new credit
Example
Imagine you have a credit card with a $5,000 limit. You regularly owe $4,500. Lenders may see you as higher risk than someone who owes $1,000 each month.
The credit score you see may be different than the score a lender sees. This is because a lender may give more weight to certain information when they calculate your score.
Why your credit history matters
Your credit history matters for borrowing money, and for identity protection.
It affects your financial future
Lenders check your credit history to decide:
- if they’ll lend you money
- how much interest to charge
- what credit limit to offer
Tip
A good credit history may help you qualify for more credit at better rates.
A poor or limited credit history may make it harder to borrow money or get a credit card. It may even affect your ability to rent a home or get a job.
It can show signs of fraud or identity theft
Checking your credit report regularly may help you detect signs of fraud or identity theft.
Learn how to check your credit report for errors and fraud.
Who creates your credit report and score
In Canada, there are 2 main credit bureaus:
- Equifax
- TransUnion
They track your credit history and create your credit report and score. They also collect, store and share your credit information with lenders and others who are allowed to see it. They only collect information about your credit activity in Canada.
Some lenders may look at your credit history from another country. You may need to provide your credit report from another country and meet with a bank officer.
Who can see and use your credit report
Credit bureaus follow rules about who can see your credit report.
Those who may request to see your credit report include:
- banks, credit unions and other financial institutions
- credit card companies
- car-leasing companies
- phone and internet providers
- utility companies
- insurance companies
- governments
- employers
- landlords
They may use your credit report to make decisions about:
- lending you money
- calculating your interest rate
- increasing your credit limit
- collecting a debt
- providing insurance
- renting you housing
- hiring you for a job
Checking your own credit report or score doesn’t affect your credit score.
When a lender or organization “checks your credit” or “pulls your report,” it creates an inquiry on your credit report.
Learn more about credit inquiries.
Consent and credit inquiries
In most provinces in Canada, you must give consent before a business or individual can check your credit.
When you sign a credit application, you consent to this. This consent usually lasts for as long as you keep the account open. Your consent also lets lenders send your information to credit bureaus after they approve your application. However, in these 3 provinces, a business or individual only needs to tell you they’re checking your credit report:
- Nova Scotia
- Prince Edward Island
- Saskatchewan
In some cases, certain government representatives, such as judges or police, can see your credit report without your consent.