What is a Credit Report and Score?

Credit Report

Your credit report is a summary of your credit history. It is created when you borrow money or apply for credit for the first time. Lenders send information about your accounts to credit reporting agencies.

Credit Score

Your credit score is a number that comes from the information in your credit report. It shows how well you manage credit and how risky it would be for a lender to lend you money. Your credit score will change over time as your credit report is updated.

Factors that may affect your credit score include:

• how long you’ve had credit
• how long each credit has been in your report
• if you carry a balance on your credit cards
• if you regularly miss payments
• the amount of your outstanding debts
• being close to, at or above your credit limit
• the number of recent credit applications
• the type of credit you’re using
• if your debts have been sent to a collection agency
• any record of insolvency or bankruptcy

Credit Score Ranges

• 800 to 850: Excellent
  Individuals in this range are considered to be low-risk borrowers. They may have an easier time securing a loan than borrowers with lower scores.
• 740 to 799: Very good
  Individuals in this range have demonstrated a history of positive credit behavior and may have an easier time being approved for additional credit.
• 670 to 739: Good
  Lenders generally view those with credit scores of 670 and up as acceptable or lower-risk borrowers.
• 580 to 669: Fair
  Individuals in this category are often considered “subprime” borrowers. Lenders may consider them higher-risk, and they may have trouble qualifying for new credit.
• 300 to 579: Poor
  Individuals in this range often have difficulty being approved for new credit. If you find yourself in the poor category, it's likely you'll need to take steps to improve your credit scores before you can secure any new credit.

There are two main credit bureaus in Canada:

• Equifax
• TransUnion

These are private companies that collect, store and share information about how you use credit.

Personal information in your credit report

Your credit report may contain your:

• name
• date of birth
• current and previous addresses
• current and previous telephone numbers
• social insurance number
• driver’s license number
• passport number
• current and previous employers
• current and previous job titles

Financial information in your credit report

Your credit report may contain:

• non-sufficient funds payments, or bad cheques
• chequing and savings accounts closed “for cause” due to money owing or fraud committed
• credit you use including credit cards, retail or store cards, lines of credit and loans
• bankruptcy or a court decision against you that relates to credit
• debts sent to collection agencies
• inquiries from lenders and others who have requested your credit report in the past three years
• registered items, such as a car lien, that allows the lender to seize it if you don't pay
• remarks including consumer statements, fraud alerts and identity verification alerts

Your credit report contains factual information about your credit cards and loans, such as:

• when you opened your account
• how much you owe
• if you make your payments on time
• if you miss payments
• if your debt has been transferred to a collection agency
• if you go over your credit limit
• personal information that is available in public records, such as a bankruptcy

Your credit report can also include chequing and savings accounts that are closed “for cause”. These include accounts closed due to money owing or fraud committed by the account holder.