Canadians need to know exactly what is information is being collected on their credit report. Surprisingly, almost half of Canadians have never seen a credit report in their lives. Why is a credit report so important?
Think about your Canadian Passport ID. You keep it in a safe place when you travel. You take care of it. And when you’re not on vacation, you store it safely. Well, your Credit Report is like your Financial ID. It is your passport into the financial world and can open many doors to loans, mortgages, car loans, and insurance. It can even determine where you can rent an apartment!
Credit Reports are your financial ID
As your Financial ID, your credit report consists of every credit transaction you can think of.
- # of Credit Cards you have opened
- # of credit cards you closed
- # of credit cards you applied for
- Your payment history and missed/late payments
- Your debt level and credit cards which are maxed out
- The amounts you own on car loans, mortgages, student loans
- Any criminal judgements and bankruptcy details
- Personal information such as age, sex, marriage status, current address, past address, employment etc
- Your credit rating and how you rank compared to other Canadians
- and a whole lot more…
Creditors, banks, mortgage brokers, landlords and your insurance company have access to this data. Companies check your credit report and your credit history because they can decide whether they would like to do business with you. The way your finances are managed will influence your relationship with such businesses and it will have an impact on your credit rating.
Canadians with a high credit score will usually have an easier time to get approved for loans and will be offered lower interest rates. Canadians with low credit scores (bad credit) may have difficulty in getting credit cards, have low credit limits and have a hard time getting car loans.
If I pay my credit cards on time why do I need to check my credit report?
Well, that fact is, mistakes can happen on your credit report. The credit bureau of Canada relies on creditors to provide them with updated information on your financial transactions. A small mistake can dramatically change your credit score and affect your for 7 years!
In extreme cases, criminals could have credit cards or loans under your name. Fraudulent credit loans happen throughout Canada and it’s best to pro-active on checking your reports.
The good news is that all Canadians have access to their credit reports and they have the opportunity to correct inaccuracies and contribute to improving their credit rating. This is one of the most important reasons why checking credit reports annual is recommended so often.
Everyone in Canada will have a credit report? Why? Very few Canadians make purchases such as their home or cars with cash. It is even difficult to buy something over the internet without a credit card. When you apply for student loans, buy insurance or get a new cell phone plan, a record of the transaction is added to your credit report.
Your credit report is important!
As you can see, your credit report is important. We know that lenders conduct their businesses based on what they see in your credit reports. Canadians have access to free annual credit report from the credit bureau. In addition to this, credit bureaus in Canada provide excellent credit watch programs that will give you immediate online access to your report. Such services provide the advantage of being able to review updated reports on a monthly basis.
Maintain your financial flexibility and keep on top of it – review them annually!