Key things to know about your credit report

Credit report? Credit score? You’ve probably heard of them, but what exactly do they mean? Why are they important? What can you do to improve your credit score or detect fraud? Here’s some key information you should know.

A credit report is a detailed record of your financial history. It contains personal and financial information, including your payment history, credit history, credit utilization ratio and the amount of your debt. Lenders use it to determine if they can trust you (credit risk level).

In Canada, there are two credit bureaus: Equifax and TransUnion. They collect the information that goes into your credit report.

Your credit report is usually created when a request is submitted to one or both credit bureaus. The request may come from a financial institution considering giving you a loan, an authorized employer, or another organization or service provider that has gotten your consent.

Have you ever lived abroad? Keep in mind that your credit report only shows your credit history in Canada only. If you have a credit history in another country, it won’t be reflected in your Canadian credit report.

The main purpose of a credit report is to determine your ability to meet your financial commitments.

Your financial institution isn’t the only service provider that can check your credit report. Others that may do so include:

• Cellphone companies
• Insurance companies (for certain types of products)
• Potential employers
• Retailers where you’ve submitted a credit card application
• Property owners you’d like to rent from

You need to give your consent before they can check your credit report. Forms often include a consent section that may also allow them to check your report again in the future.

Each time someone checks your credit report, they leave a trace, allowing you to see which organizations accessed your information and on what date. Credit checks can be divided into two main categories: credit-related inquiries, or “hard checks,” and non-credit-related inquiries, or “soft checks.” Credit-related (or hard) inquiries affect your credit score, whereas non-credit-related inquiries don’t.

Here are some examples:

Your credit report contains your credit score. It’s generally somewhere between 300 and 900. The higher the score, the better your credit rating. Each credit bureau calculates the score using its own method, even though they base their calculations on comparable factors. That’s why the same person can have two different credit scores with Equifax and TransUnion.

Avoid behaviours that can harm your credit score, such as:

• Paying your bills or debts late—or worse, failing to make the required payment
• Making a lot of credit applications or requests for higher limits, especially over a short period
• Using all of your available credit or regularly maintaining a balance close to your authorized limit
• Allowing a debt to be referred to a collection agency because of non-payment
• Declaring bankruptcy or submitting a consumer proposal

It may seem surprising, but not using credit at all can hurt your credit report. If you don’t have active credit accounts, the credit bureaus have too little information to assess your ability to repay your financial commitments on time, which may result in a low or no credit score.

Checking your credit report regularly is essential to understand your situation and protect your financial well-being. Regular checks can help you:

• Make sure the information is correct.

Credit reports can have mistakes, such as payments mistakenly marked as late, wrong balances or accounts that that don’t belong to you. Regular checks help you quickly spot these issues and get them fixed.

• Detect fraud or identity theft.

A new account you don’t recognize or an unusual credit application may be a sign of fraud. Checking your credit report often allows you to act quickly to limit any damage. This is important regardless of whether you’ve been a victim of identity theft in the past.

• Monitor changes in your credit score.

Your credit score varies depending on your financial habits. Checking it regularly helps you understand how your actions—such as on-time payments, reducing debt and applying for new credit—affect your score, so you can adjust your behaviour as needed.

• Better prepare for a major project.

For example, before applying for a mortgage, car loan or a new credit card, it’s a good idea to review and understand your credit report. This gives you the opportunity to address certain issues and avoid unpleasant surprises.

You can check your Equifax and TransUnion credit reports for free anytime in the Credit report section via Desjardins’s online and mobile services.

Or you can visit the Equifax and TransUnion websites:

• View your Equifax credit report
• View your TransUnion credit report

You can sign up to receive email alerts by entering your address in the My profile section of TransUnion’s CreditView® Dashboard. That way, you’ll get an alert whenever a credit inquiry or significant change is made to your report.

Fraud alert:

You can add a fraud alert to your credit report. It alerts any company or individual accessing your credit report that they must carry out additional checks to verify your identity before going any further.

1. Make a note of any mistakes so that you can clearly report them to the relevant credit bureau. Does the mistake involve:

• An account that doesn’t belong to you?
• A payment marked late even though you made it on time?
• A phone number you don’t recognize?
• A closed account that is listed as active?

2. Check if the issue affects both of your credit reports: Equifax and TransUnion.

3. Report the inaccurate information:

Equifax: Dispute information on your credit report

TransUnion: Dispute your credit information or file a complaint

Depending on what you want to correct, you may need to provide proof.

4. Make sure to follow up to confirm the correction has been made.

When you report an error, the credit bureaus have a legal obligation to verify the accuracy of the disputed information.

However, you cannot dispute information just because it has a negative impact on your credit score. If the information is accurate, it will remain on your credit report.

If you suspect fraud or identity theft—for example, if a new loan you didn’t apply for appears on your credit report—you can contact Desjardins’s dedicated team for support at 1-800-CAISSES (1-800-224-7737).

Learn how to protect yourself against identity theft and learn about the benefits of Desjardins Identity Protection.