Everything you ever wanted to know about credit reports, but didn't know what questions to ask
OTTAWA, Sept. 14, 2012 /CNW/ - Credit reports can have a major impact on your life, but many Canadians do not know much about them.
"Our recent survey on Canadians' knowledge of their rights and responsibilities found that knowledge of credit reports was particularly low," says FCAC Commissioner Ursula Menke. "The vast majority of people—90 percent—do not know that they can obtain a credit report free by mail, while 62 percent do not know how to dispute an entry in their credit report."
Credit reporting agencies track how you use credit products, such as credit cards and loans, and pay your bills. This information is used to create your credit report and credit score. Lenders may use this information when they decide whether they will lend you money, and how much they will charge you to borrow it. Employers and landlords may also check your credit report when you apply for a job or rent housing.
"It's a good idea to check your credit report at least once a year, and doing so will not hurt your credit score," says Commissioner Menke. "Think of it as an annual checkup for your financial health."
To help Canadian consumers, the Financial Consumer Agency of Canada (FCAC) has updated and added to the free, unbiased information it provides consumers about credit reports.
Credit report and score basics
FCAC's enhanced publication, Understanding Your Credit Report and Credit Score, provides tips and information:
How can I benefit from a good credit history?
- You may be able to get a lower interest rate on loans, which can save you a lot of money over time.
How long does negative information stay on my credit report?
- The exact amount of time varies by type of information and by province or territory. For most negative information, the maximum is six or seven years.
How can I improve my credit score?
- Always make your payments on time even if you can only manage the minimum amount. If you think you will have trouble paying a bill, contact the lender to see if you can work out a special arrangement.
Will shopping around for a car or mortgage hurt my score?
- You may reduce the impact if you shop around within a two-week period. All inquiries related to auto or mortgage loans made during this time are usually combined and treated as a single inquiry.
Is my mortgage included in my credit report?
- Your mortgage information and your history of mortgage payments may appear in your credit report and may count toward your credit score. This depends on the practices of each credit reporting agency.
Order your free credit report
You have the right to see your own credit report. FCAC's tip sheet, How to Order Your Credit Report has details on how to get your credit report free of charge:
- You may order your free report by mail, fax, telephone or in person.
- You must receive it by mail or in person.
- If you choose to access your report online, you will have to pay a fee.
Correct any errors and check for fraud
Ensure the accuracy of your credit report by checking carefully for errors. Your credit report will also show if you have been a victim of fraud. FCAC's tip sheet, Protecting Your Credit Report: How to Correct Errors and Check for Fraud, outlines the steps to take if you have any questions about the information in your report, and also what to do if you are a victim of fraud.
FCAC has also posted two Tip Clips on its YouTube channel to help consumers find out more about credit reports and how to protect themselves from fraud.
With educational materials and interactive tools, the Financial Consumer Agency of Canada (FCAC) provides objective information about financial products and services to help Canadians increase their financial knowledge and confidence in managing their personal finances. FCAC informs consumers about their rights and responsibilities when dealing with banks and federally regulated trust, loan and insurance companies. FCAC also makes sure that federally regulated financial institutions, payment card network operators and external complaints bodies comply with legislation and industry commitments intended to protect consumers.
You can reach us through FCAC's Consumer Services Centre by calling toll-free 1-866-461-3222 (TTY: 613-947-7771 or 1-866-914-6097) or by visiting our website: itpaystoknow.gc.ca.
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Video with caption: "Video: Your Credit Report - Free by Mail! ". Video available at: http://stream1.newswire.ca/cgi-bin/playback.cgi?file=20120914_C6450_VIDEO_EN_17864.mp4&posterurl=http://photos.newswire.ca/images/20120914_C6450_PHOTO_EN_17864.jpg&clientName=Financial%20Consumer%20Agency%20of%20Canada&caption=Video%3A%20Your%20Credit%20Report%20%2D%20Free%20by%20Mail%21%0D%0A&title=Tip%20Clip%3A%20Your%20Credit%20Report%20%2D%20Free%20by%20Mail%21&headline=%40FCACan%20offers%20tips%20on%20credit%20reports%26%23x2014%3Bhow%20to%20order%20them%20for%20free%2C%20correct%20errors%20and%20check%20for%20fraud
Image with caption: "90 percent of Canadians do not know that they can obtain a credit report free by mail. (CNW Group/Financial Consumer Agency of Canada)". Image available at: http://photos.newswire.ca/images/download/20120914_C6450_PHOTO_EN_17862.jpg
SOURCE: Financial Consumer Agency of Canada
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