8/23/2007
OTTAWA, August 23, 2007 A recent
study conducted on behalf of the Financial Consumer Agency of Canada (FCAC) revealed that
50 percent of Canadians were unaware of the factors that contribute to an
individual's credit rating, and only 15 percent said they had
requested a credit report for themselves in the past.
Some of the main factors that can influence a consumer's credit report
and credit score include payment history, any collection or bankruptcy recorded
against the individual, outstanding debts, account history and the type of
credit the person uses. A credit report is a file maintained by a credit
reporting agency, based on information supplied by lenders, that paints a
picture of a consumer's past and current credit situation, showing how
good he or she is at paying back debts and what debt is currently outstanding. A
credit score is a numerical rating
based on the contents of a credit report, an automated assessment of a consumer's
credit worthiness.
"Many Canadians don't realize how important their credit reports
and credit scores really are. How good your credit score is can determine
whether you are eligible for everything from a credit card to a mortgage,"
said FCAC Acting
Commissioner Jim Callon. "A low credit score can also have a big
effect on your day-to-day life by increasing the overall cost of a loan, and
even making it more difficult for you to rent an apartment or purchase a cell
phone."
FCAC today
also launched a new online interactive quiz that provides a fun way for
consumers to test their knowledge of credit reports and credit scores. The quiz
asks questions about credit reports and credit scores, and then provides answers
to help consumers fully understand these products.
The new quiz makes it easy for consumers to test and expand their financial
knowledge of credit reports and credit scores, showing them how their credit
history can affect them. It is available through FCAC's new consumer portal,
moneytools.ca.
"FCAC
encourages consumers to shop around for their credit needs, but they should also
remember that too many credit applications can have a negative impact on their
credit score," said Mr. Callon.
Here are some key tips and facts for consumers to keep in mind about credit
reports and credit scores:
You can obtain your credit report free of charge if you request it by
mail. You should check your credit report thoroughly at least once a year and
make sure that all the information it contains is correct. If you find an error
have it corrected right away since it could have an impact on your credit score
and therefore your ability to obtain a credit product.
Your credit report is also the first place to check for signs of identity
theft. If your report lists suspicious credit card accounts or loans, someone
may have taken your personal information to obtain these products fraudulently.
If you don't verify your report on a yearly basis, you may not realize you
have been a victim until you are turned down for a loan.
Your credit score does not change when you ask for information about your
own credit report. However, for a consumer with a limited credit history or with
a history of late payments, the number of inquiries made by potential lenders
resulting from various credit card applications can have affect the credit
rating.
You should order your credit report from all three credit reporting
agencies across Canada: Equifax, TransUnion Canada and Northern Credit Bureaus.
They do not collect and report identical information, so if you don't
request your information from all three you may not be viewing all of your
financial history.
For a fee, you may also want to find out what your credit score is. If you
do, make sure you read the information provided to you by the credit reporting
agencies about the factors responsible for bringing your score down. If you take
their advice into consideration and implement their suggestions, you may be able
to improve your score.
For more information, consumers are invited to read FCAC's publication Understanding
Your Credit Report and Credit Score. This booklet contains tips on how to
establish a positive credit history or improve a negative one. It also provides
information on how consumers can obtain a credit report for free by mail, how to
understand the coded information it contains, how to have any error that shows
up on a report corrected, and how to obtain and understand a credit score.
The Credit Report and Credit Score Quiz complements other useful interactive
tools developed by FCAC, all with the purpose of keeping Canadians informed about
important financial products and services. Credit Cards and You includes a quiz
to help you test your knowledge and learn more about credit cards; the Cost of
Banking Guide contains a quiz on bank accounts.
For more useful and interesting ways to expand their financial knowledge,
consumers are invited to explore FCAC's Web site at www.fcac.gc.ca ,
which can also be accessed through the Agency's new consumer Web portal,
moneytools.ca. They can also call FCAC toll-free at
1-866-461-3222 (1-866-914-6097 for TTY service) for more
information or to order any of FCAC's many publications free of charge.
FCAC ensures
compliance with the consumer protection laws and monitors codes of conduct and
public commitments that apply to banks and federally incorporated trust, loan
and insurance companies. FCAC also provides consumers with accurate, objective
information about financial products and services, and informs Canadians of
their rights and responsibilities when dealing with federally regulated
financial institutions.
- 30 -
Media contacts:
John Kane
Manager, External Communications
613-941-8988
kane.john@fcac.gc.ca
