Our blog has various posts dedicated to credit score. From understanding the impact of credit checks to explaining credit score ranges — we’ve covered a lot of important topics, which we’ll link for you throughout this post. But today’s topic is dedicated to explaining exactly how to check your score so you can increase your creditworthiness one step at a time.
According to consumer reporting agencies, more than 21 million Canadians have credit reports. Ultimately, anyone over the age of 18 who’s ever borrowed money has a credit score. The crazy thing is, few people ever check them.
Checking your credit score regularly is the first step to improving your credit. Check out our post 5 Reasons Why You Should Check Your Credit Score Regularly to learn more about the common misconceptions around credit scores and how to fix them.
How to Check Your Credit Score in Canada
You can ask for a free copy of your credit report by mail. There are two national credit bureaus in Canada: Equifax Canada and TransUnion Canada. You should check with both bureaus. Full details on how to order credit reports are available online.
We often mention TransUnion Canada and Equifax Canada as the two credit bureaus to use to check your score. Today we’re going to dig deeper and detail the steps needed to access your score from either of these resources in a safe and efficient manner.
Here are the 5 steps you’ll need:
- Step 1: Choosing a Credit Bureau
- Step 2: Gathering Identification Pieces
- Step 3: Determining How to Receive your Report
- Step 4: Understanding your Credit Report
- Step 5: Monitoring your Credit Score Monthly
Step 1: Choosing a Credit Bureau
Under Canadian law, you’re entitled to your credit report once per year at no cost. You have the option of receiving your report by either mail, in-person or online, which we’ll discuss further in Step 3. With two credit bureaus to choose from, which do you go with? The answer is actually, both.
Though most consumers don’t realize it, your credit score has minor changes from one credit bureau to the next. This is because every bureau, financial institution and lender use a different model to determine credit score. For example, TransUnion may weight payment history as 35% of your score whereas Equifax may weight it at 40% (these are hypothetical numbers). Knowing both scores will ensure there aren’t any unexpected surprises when you apply for a loan.
The best practice is to order each score 6 months apart. For example, you can apply for your report from Equifax Canada in January and your report from TransUnion Canada during the summer. This will allow you to monitor your spending habits and understand where your financial health stands.
Note: Equifax Canada refers to your credit report as “credit file disclosure”. TransUnion Canada refers to your credit report as “consumer disclosure”.
Though it’s important to get your credit report from both bureaus, you shouldn’t turn to your lender to find out your score. Asking your bank, credit union or dealership to check your report for you can actually negatively affect your credit score.
Check out our blog post How Do Credit Checks Impact Your Credit Score? to understand the differences between soft and hard inquiries and the effect each one can have.
We also suggest being mindful of websites and apps that claim to check your score without affecting it. There are some credible third party website out there, such as BankRate.com and Borrowell.com, but many of them are scams. Anytime an unauthorized website asks for additional personal information, such as your SIN number, it will show up on your credit report.
Step 2: Gathering Identification Pieces
There are two different processes depending on whether you’re accessing a free report or one you pay for.
Free Report Process
1. Download the Canadian Credit Report Request Form
2. Photocopy two pieces of government-issued ID — this can be any of the following documents:
- Driver’s license
- Health card
- Birth certificate
- Bank statement or phone bill (only if your home address isn’t up to date on the above documents. Please black out confidential information)
3. Fill out the form with your contact information
4. *Optional Include your SIN number on the form. This step is optional, however, if you’re requesting a report from a reputable source, such as TransUnion Canada or Equifax Canada, we suggest it. Providing your SIN helps speed up the cross-reference check the credit bureau performs, meaning you’ll receive your report quicker.
5. Send in your completed form and proof of identity in a well-sealed envelope by mail or by fax to the provided address.
You should receive your report within 5 – 10 days!
Paid Report Process
You also have the option to pay for your credit report. You may be wondering why you’d choose to do so if there’s a free option available. These are a few of the possible reasons:
- You’ve already received your free annual report
- You’re looking for a more in-depth credit report, which isn’t provided with the free option
- You’re wanting to cross-reference your report as it had noticeably different scores from each bureau
Lately, there’s been some controversies regarding whether it’s necessary to ever pay for your credit report. The key thing to remember here is that your credit score and your credit report are two different things, meaning even if you check your score regularly there’s still key information you haven’t seen. Your score provides you with a three digit number, which lenders use to determine your creditworthiness. You can easily access your score through your bank or a third party website, such as Bankrate.com.
Your credit report is an in-depth report of the factors contributing to your score. The only time we suggest paying for your credit report after you’ve already used your free annual one is if you’re in a poor credit situation and working to rebuild it.
If you do decide to pay for the report, you’ll follow the same process as the free report but with this one additional step:
6. Include your credit card information at the bottom of the Canadian Credit Report Request Form.
Step 3: Determining How to Receive your Report
There are three ways you can access your credit report:
- By mail
There are two ways you can receive your report by mail:
- Fill out the online form explained in the previous step
- Order your report by phone by simply calling the number TransUnion Canada and Equifax Canada provide on their websites. A representative will ask you to confirm your identity by answering a few personal questions, then you’ll receive it in the mail within 1-2 weeks.
The benefit to requesting your credit report in person is that you’ll receive it the same day. Both Equifax Canada and TransUnion Canada have offices located throughout Canada. Unfortunately, neither bureau has an office in Manitoba. Here’s the full list of all provincial locations for both bureaus.
Receiving your report online is convenient because you’ll get it immediately. However, there’s no free option for receiving your report online.
Step 4: Understanding your Credit Report
Once you receive your report, you may feel overwhelmed by the number range and what it all means.
Our helpful blog post, Credit Score Ranges in Canada Explained, breaks down what each score means and how to determine where you land on the creditworthiness scale. We suggest giving it a read!
The primary thing to understand about your report is what each letter and number means. They act as a type of code for lenders to tell the credit bureaus how you are at repaying loans.
These codes have two parts:
- the letter shows the type of credit you’re using
- the number shows when you make payments
Check out The Financial Consumer Agency of Canada’s guide to understand each value’s meaning.
Step 5: Monitoring your Credit Score Monthly
Several organizations, including TransUnion Canada, Equifax Canada and large banking institutions like RBC, offer monitoring services. These services are a good option if you’re concerned about fraud or identity theft as well as if you’re trying to improve your creditworthiness within a short time period. While credit monitoring lets you know if you’ve been the victim of fraud, it won’t let you know until it’s too late nor will it stop it from happening.
Monitoring also comes at an added cost. Both TransUnion Canada and Equifax Canada offer credit monitoring at an average monthly price of $20.00. Both bureaus offer free 30-day trials as well, which we suggest trying before determining whether it’s the right financial decision for you.
If you’re concerned about fraud, remember that most major credit card issuers offer zero liability protection for unauthorized payments, which will protect you if your card is lost or stolen.
The bottom line is that credit monitoring is an additional expense to your monthly budget so you should weigh out the pros and cons before making your decision. If you’re free report twice a year doesn’t provide you with enough information, you can always pay for instant online access at any time.
Overall, understanding your credit score is an important part of maintaining your financial health. Reading posts like this is the first step to improving your creditworthiness.
At Birchwood Credit Solutions, we specialize in working with all types of credit situations and our goal is to give everyone an equal opportunity to drive a safe and reliable vehicle. We have the experience and resources to help with all types of credit situations including less than perfect credit, new car buyers, new Canadians, bankruptcy, divorce, and low income. If fears about your credit situation are keeping you from getting a new vehicle, contact our team for more information on our process and how we can help get your driving.
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