Credit Reports and Scores 101

Credit Reports and Scores 101There comes a time in your life when you may need to get a credit report – especially when you are ready to purchase a home. Credit reports can seem intimidating, especially when you don’t know exactly what to expect. To keep you ahead of the game, here we break down everything you need to know about credit reports and scores.

What is a credit report?

A credit report basically outlines the past six years of your financial history. It includes information about every loan you’ve taken out, your payment history, your credit limit on each account, a list of all authorized credit grantors, and more.

Who creates the report?

In Ontario, Equifax Canada and TransUnion Canada create the credit reports. These consumer reporting agencies collect the information from the bank, credit card companies, mortgage lenders, and creditors.

Who can request a report?

Lenders, creditors, insurance companies, potential employers, and landlords have the ability to request a copy of your credit report. However, law states that the consumer reporting agency must obtain your consent before they pass on a copy.

How to obtain a credit check?

You can obtain a free credit check whenever you wish. It is recommended to check your credit at least once a year to ensure everything looks accurate. To obtain a copy you can contact Equifax Canada or TransUnion Canada. Just be aware that if the information looks inaccurate you should report it to ensure that you have not been a victim of identity theft. To correct the information, ensure you have all the relevant proof necessary. You can also ask the consumer agency to notify anyone who has received a copy in the past six months to one year of the error.

How to obtain good credit?

To obtain good credit, pay your debts on time and avoid going over your credit limit. If you have had poor credit, stay focused at improving your payment habits and pay off high-interest loans first. Keep your credit healthy and your score will reflect it.

How to avoid identity theft?

You can ask a consumer agency to put an alert on your file for a fee. It will warn a person to verify the identity of anyone who claims to be you. Plus, they must give the alert to anyone else who receives information from your file and must take the appropriate steps to verify that they are actually dealing with you.  Also, be wary of companies offering to fix bad credit – fees paid for this type of service can be illegal. Check beforehand to ensure the institution is offering a legit service.

What if I have bad credit?

If you have bad credit, you may be rejected by the banks. VERICO The Financial Forum Ltd. has a range of options to assist and get you approval. With 20% down or at least 20% equity, we can obtain a mortgage for almost any credit situation. Debt consolidation is also a great way to manage your cash flow and save money.

Don’t let poor credit affect your future investments. Understand how the credit rating system works and keep paying your monthly payments on time. Keeping a good credit score is important for your future.

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