Objective:
Understand the importance of credit score monitoring and learn how to access a free copy of your report from the two main reporting agencies in Canada.
Learning Outcomes:
- Understand the importance of credit report monitoring when applying for new credit card products
- Know where to access a free copy of your Transunion credit report
- Know where to access a free copy of your Equifax credit report
Introduction
Monitoring your credit score when applying for any form of credit or loan is important for a few reasons:
- Knowing your score will help you make informed decisions when applying for a new product. This is especially important if you have fair – good credit (as opposed to excellent), when you may be at risk of being declined.
- Credit scores change routinely based on new accounts, payment history, applications (inquiries), and debt levels, and it’s important to keep track of how your score fluctuates with new applications.
- The two main reporting agencies in Canada, Equifax and Transunion, use different formulas to calculate credit scores. Lenders will look at one or the other (or sometimes both) and it’s important to know your profile with both. If you get declined, you can often be reconsidered, and knowing your report details for each reporting agency will be important.
- It’s not uncommon for errors to be made with credit reporting, and you should monitor for any mistakes, especially negative information that can lower your score.
Aggressively applying for new credit products could have a short term negative impact on your credit report. With good payment history and responsible use of credit, you should see your score rebound, or even increase, as payment history and credit utilization are more heavily weighted than credit inquiries. For those with good-excellent credit, applying for a few new products per year should have a negligible impact on your overall creditworthiness.
Where To Get A Free Copy Of Your Credit Report
Free credit reports have been available for US consumers for years, but up until recently, the only options Canadians had was to pay a subscription fee to either of the main reporting agencies. Canadians also had the option to request a free copy annually, but that report only included account information and didn’t provide a numerical score.
However, recently there have been a few new Canadian companies (primarily financial service providers) that are able to provide free access to your full credit report, including score.
Transunion:
Currently the only option to obtain a free copy of your Transunion report is through Credit Karma
Equifax:
There are multiple places to access your Equifax report, including:
There are also a number of financial institutions, such as CIBC, that are starting to provide credit report monitoring free of charge for their banking clients.
Using any of the above service providers is safe and easy, and will not count as a hard inquiry to your credit file. The registration process is fairly simple, with a few identifying questions and standard information such as name, address, date of birth, etc.
