How to Read a Credit Report in Canada

Having a credit report is one thing, but interpreting it correctly is another. Everyone should be aware of the current state of their financial affairs, and much of that information is contained in the reports from the three bureaus in Canada that receive a gigantic amount of information about you: Equifax Canada, Trans Union Canada and Experian Canada. To get a complete picture of your finances, you must look at your reports from all three bureaus. These reports divide your information into four parts: identification, history of your credit, information from public records and inquiries from creditors.

Instructions

1

Check the accuracy of the identifying information. First, check the spelling of your name and your Canadian Social Security Number. Then see if your current and previous addresses are correct along with your birth date, employer, the name of your spouse and your age. Report any inaccuracies to the respective credit bureaus.

2

Carefully look at your credit history because that area is prone to more errors than the remaining sections combined. That section will show the names of your creditors, the date your account was opened and the type of account and the loan total or the highest balance if it is an installment account. The report shows how much you owe, the amount of the monthly payments and how well you have paid them. Hope for a report that says you are never late. However, it might say "charged off" or "default," which indicate problems to prospective creditors.

3

Expect problems with obtaining credit in the future if there are items contained in the report that the bureau received from public records. Financial items such as tax liens, monetary judgments against you or bankruptcy will negatively affect your ability to get credit in the future.

4

Pay attention to the fourth section of your credit report--inquiries from creditors--because it can affect your credit going forward. The bureaus record any inquiry they receive about you, not only from creditors but even that you have asked for a report. The "inquiries" section is broken down into "hard" and "soft" inquiries. An example of a "soft" inquiry would be one the bureau receives from a credit card company that prescreens you before it mails out promotional information. On the other hand, a "hard" inquiry results from you making a written request for credit, or you trying to rent an apartment and the lessor making a credit check. "Hard" inquiries received by the bureaus can affect your credit, particularly if there have been several over a short span of time.