A credit rating is an evaluation of your credit history, which many lenders use to determine whether or not they will give a loan or line of credit to an individual.
Canada has two major credit-reporting agencies:
What Does a Credit Rating Report Contain?
A standard credit rating report contains a number of personal details including:
This is information such as your name, current and previous address(es), social insurance number, telephone number, date of birth, and your current and previous employer(s).
This is information related to any credit you may already have, such as a credit or retail card, a line of credit, a loan or a mortgage.
This is information about the accounts you have, including any NSF (non-sufficient funds) or "bad" cheques you may have written.
This is any information on the public record such as a bankruptcy or a credit-related court judgment against you in a lawsuit. Secured loans, which are backed by an asset (your property for example), may also appear in your credit report.
This shows whether you ever had a debt that you could not pay which was referred to a collection agency for payment.
This is any statement you may have made to explain a particular situation, such as a dispute with a financial institution or a fraud warning.
Credit Report Inquiries:
This is a list of all of the people who have inquired about your credit: yourself, a lender, or any other authorized organization.
Source: Financial Consumer Agency of Canada. www.fcac-acfc.gc.ca
Who May See My Credit Rating Report?
Only you and parties that you authorize may see your credit rating report.
For example, when you apply for a loan, a line of credit or any other form of credit, you usually authorize the lender to access your credit rating report.
How Can I Improve My Credit Rating?
There are a number of steps you can take to improve your credit rating. For example, do not “over-borrow” – only borrow amounts that you can reasonably pay back. Also, keep your spending under control by identifying the difference between a need and a want – do not purchase luxuries that you cannot afford. You should also develop an attainable schedule to pay back loans and lines of credit before you borrow so you know how long you will be in debt. Plan to pay back these amounts as quickly as possible.
For more tips on building a good credit rating, or to book a free initial consultation, contact us at 204-944-0187 (toll free: 1-800-263-0070). If you would prefer, you can complete our First Step form.