Information Listed On Credit Reports
Most people are aware that they have a credit file, but few people know what’s on it.
Knowing what information is on your credit report is important, particularly if you want to apply for credit or if you’ve been turned down for credit.
However, accessing this information isn’t always straightforward.
To ensure you’re able to verify the accuracy of your credit report, you’ll need to know how to obtain it, how to interpret the information it contains and, crucially, how companies assess you.
People tend to assume that everyone has one, unique credit report but, in actual fact, this is rarely true.
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In Canada, there are two main credit bureaus: Equifax Canada and TransUnion Canada.
Both collect data pertaining to your credit history so it’s highly likely that you’ll have a credit report with each bureau.
However, companies and financial institutions may not always use both bureaus.
This means that the information held by Equifax Canada and TransUnion Canada is often different, even when you’re searching for your own credit report.
To ensure you have access to all the relevant information and an accurate insight into your credit history and rating, you’ll need to obtain credit reports from both bureaus.
Fortunately, individuals are entitled to one free copy of their credit report every year, so you won’t need to pay any costly fees to access this information.
How Many Sections Does a Credit Report Contain?
A credit report is typically split into four sections:
- Personal information;
- Trade lines;
- Inquiry information;
- Public records and collections information.
If you want to be able to decipher the data that’s presented on your credit report, it’s important to look at these four sections in a little more detail.
This is arguably the most straightforward section of your credit report.
As well as your full name, the personal information section of your credit report will list your address, current employment status, previous employment status and date of birth.
If you have a line of credit with any company or lender, it should appear in this section of your credit report.
Generally, organizations will report trade lines to both bureaus, so the information in this portion of your report is likely to be the same on documentation from both credit bureaus.
Various different types of credit are considered to be trade lines, so you may see credit cards, mortgages, loans and alternative types of credit listed here.
As well as the name of the lender, your credit report should state the date you opened the line of credit, your up-to-date account balance, your payment history and your current credit limit.
Inquiry information simply shows who has been looking at your credit report.
There are two types of inquiry: soft and hard.
A soft inquiry doesn’t affect your ability to borrow money, access credit or your credit score.
In contrast, a hard inquiry can have an impact on your credit score and your ability to successfully obtain credit.
If you search for or view your credit report, it will appear as a soft inquiry, so there’s no need to worry that it will have a negative impact.
Similarly, if an existing lender checks your report to monitor your financial behaviour, it’s classed as a soft inquiry.
A hard inquiry typically happens when you apply for credit and a lender checks your credit report before accepting or denying your application.
A notice of a hard inquiry can stay on your credit report for up to 36 months and, during this time, it might affect your ability to access credit facilities.
If you make numerous applications for credit in a short period of time, for example, it could indicate that you’re struggling financially and/or other lenders have repeatedly turned you down.
As this doesn’t reflect well on your financial standing, repeated credit denials could make it harder to access credit from alternative lenders.
Public records and collections information
In this section, you may see a range of information.
If a lien is placed on one of your assets, it will be listed here, for example.
This typically happens when you have secured debt and the creditor places a lien to reflect their interest in the asset.
If you have a car loan, for example, the creditor may place a lien on the vehicle so that they can repossess it if you breach the terms of your contract.
In addition to this, legal activity relating to your finances is also listed in the public records and collections information section of your credit report.
If you’re made a consumer proposal, filed for bankruptcy or had CCJs made against you, for example, they will be listed here.
Similarly, if any of your accounts have been turned over to collections agency, it will show up on this portion of your credit report.
Dealing with Errors on Your Credit Report
If your credit report contains inaccurate information, it’s important to deal with it as quickly as possible.
A mistake on your credit file will impact your ability to obtain credit and you could be left without access to loans, credit cards and even a mortgage if your credit score is devalued due to an error.
Both credit bureaus have in-house processes for dealing with reported errors, so be sure to follow the relevant procedures and ask to have your data amended.
Although the law requires the bureaus to investigate such issues in a ‘timely manner’, it can still take some time for errors to be addressed and rectified.
Due to this, it’s important to check your credit report regularly and notify the bureaus if the information they hold about you is wrong.
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