Canadian Credit Bureaus capture information about credit transactions on a regular basis – from payment history on credit cards, to loan balances on house and car. However, credit bureaus only receive information that is reported to them by the lenders. The keyword here is receive. Think of the Credit Bureau as a container that is setup to receive financial data from lenders. Naturally, a credit bureau will only be aware of things that a lender adds to it. Everything else that is not in the container will not be included in a credit report.
In Canada, there is no law that states that lenders must report credit transactions to the bureau. In fact, it’s entirely voluntary! There is no set rule to when the lender should report to the bureau, and there is no set rule about how often or if they need to report at all. However, if they do decide to report credit information, the law states that information must be as accurate as possible.
Lenders such as TD Bank, Royal Bank and other organizations in Canada generally depend on the information on a personal credit report. They use this information to make financial decisions and to determine if a loan will be approved or rejected. Because of this, lenders who choose to participate in credit reporting, do so, because it will help the lending industry overall. Most of the larger lenders will report to the main credit bureaus in Canada: Equifax and TransUnion. Information on credit reports include credit card payment, balances, mortgage amounts and even student loans. The more that gets report, the better and more accurate for lenders to determine your financial health.
Sometimes, you will find that lenders don’t report much at all. Some phone companies, pay day loan stores, and private lenders could report very little, even though they have access to the bureau. Reporting for these companies will take extra time and resources which they may not find it beneficial to have.
If you’re thinking about maintaining or improving your credit score, keep in mind that your score will not change if the lenders you have don’t report anything. That’s why you will see lenders promoting that they report to the bureau on a monthly basis. This is good a good thing and helps to build a good credit history.
On the flip side, if you ever have a missed payment, give your lender or credit card company a call. In some cases, you can work out a payment agreement and your credit score will not be affected. Late payments don’t necessarily show up on your credit report until the lender reports it. In fact, your credit report is only as accurate as the information that is being added to it. Therefore, when dealing with any of the credit bureaus in Canada, be aware that they are unaware of any mistakes unless you point it out to them. The bureau will then have to verify the information with the lender.
Remember, your credit report is your ‘financial ID’ and it’s up to you to keep it in good standing. Regardless of how often a lender reports your activities, maintaining a manageable balance and making regular payments on time will go a long way to having a great credit history.