Anyone looking to improve their current credit score needs to do one thing first: request their current credit report in order to get your score. However, a lot of people are hesitant when it comes to requesting a report for fear of either lowering that score or having it cost too much to receive.
The good news is that no matter what your score (good or bad) you can request the information for free from a few different sources, and they will offer the results for free. Having a negative credit history may result in difficulties accessing loans, and you may have to approach lenders that provide loans for people with poor credit.
In this article, we’ll breakdown how these requests can be made, and what exactly you’ll see once you request your free report score.
Credit Score vs. Credit Report
There is a difference! It’s a common mistake, and it’s common to use the two terms interchangeably, but they are different.
A credit report or credit check is what happens when your financial history and debt repayment history is verified and shown to you or a financial institution looking at give you credit. This report looks into your reliability for lenders and assesses your risk level when it comes to applying for a line of credit or an emergency loan online. The credit report does not include your credit score, however, it is used to determine that final number.
On the other hand, your credit score is a number assigned to you based on your report that determines how high- or low-risk you are when it comes to things like applying for a credit card or mortgage or buying a new car. A typical credit score ranges from 300 to 900, and the average Canadian credit score hovers in the 650 range according to TransUnion. If you find yourself on the lower range (Learn What is a Bad Credit Score?), don’t worry there are always ways to bring that number up and get yourself in better financial standing.
Where to Get a Free Credit Score Report in Canada
Getting a free credit score report in Canada is actually quite simple and can be done in a few steps online or even on your smartphone. There are a few options when it comes to getting a free credit score report in Canada. The two most trusted sources are Equifax and TransUnion.
Check your report to get to your score on Equifax
If you want to check your credit report in order to then get your score on Equifax, you’ll have to take the following steps:
• Create a my.Equifax Account
Visit the myEquifax portal and sign up to create an account. This step does not cost anything but will require you to provide sensitive and personal information like your address, phone number and Social Insurance Number (SIN). .
• Request Your Credit Report
Equifax offers a free copy of your credit report once every year via mail – this is something that’s relatively new and wasn’t always available to Canadians, however, the government realized how important it was for Canadians to know their financial history in order to properly take care of their credit score and overall financial health.
This requested report will contain your personal information, credit account information, hard inquiries (these are credit history checks done when you apply for things like mortgages, buying a new car or applying for a large line of credit), bankruptcies, and collection accounts.
However, this report will not include your overall credit score. If you’d like to get a free Equifax credit score online, you can easily subscribe to their 30-day trial of Equifax Complete™ Premier.
Check your report to get to your score on TransUnion
While requesting your actual credit score from TransUnion will cost, you can always ask for your credit report for free with the following steps:
• Create a TransUnion Account
Visit the TransUnion credit report portal to sign up for a free account on the site. Keep in mind that they will ask for sensitive information just like Equifax.
• Request Your Credit Report to get your Score
From your TransUnion account you can easily request your credit report once a year, for free. This will be sent to you via mail, free of charge. However, if you really want to receive that credit score more quickly online (in order to get that overall score more quickly) you will have to pay a fee. You can check out the pricing on TransUnion’s website.
What you’ll find on your Credit Report
Just like you can request your credit report and score from TransUnion and Equifax, you can also access samples of credit report, so you know exactly what you’re looking at when it arrives. Despite that, properly understanding the information contained in your credit report can be confusing, so we’ve broken it down for you:
Here’s a credit report code breakdown:
● I (Installment credit): This indicates you have a loan set for a certain time, and you are responsible for making regular fixed payments.
● O (open status credit): This shows that you have the ability to instantly borrow money up to a certain amount, which can be limited still.
● R (revolving or recurring credit): This code means that you have money that is available to you to borrow again and again, based on your credit limit.
● M (mortgage loan): Any and all active mortgages you may have under your name will be listed here.
There are also numerical digits in the credit report code that indicate various stages of a debt or its status or prepayment or not.
● 0: New debt.
● 1: On-time payments and amounts.
● 2-3: This is where late payments are shown, based on how late they actually are. These late payment numbers changed as your repayments stretch past the 29-day mark. For example: if your debt isn’t repaid by the end of that 29th day, the number rating on your credit score will increase until you hit that next 29-day marker.
● 5: This number means you have 120 days of overdue payments that have not yet been sent to a collection agency.
● 9: If you see this on your credit report, you have a debt repayment that is currently with a collection agency, or you’ve declared bankruptcy recently.
Note: Remember that 4, 7, and 8 are the stages in between those indicated above. Number 6 is not used in a credit report.
Knowing Your Credit Report Will Help Your Credit Score
Requesting your free credit report in Canada is the first step in helping you know and raise your current credit score and will help you move towards financial health and stability. Having a healthy credit score means you can easily apply for emergency loans from a licensed Canadian lender like iCASH or a line of credit from your personal bank when you need.
Keeping that score up can only be achieved if you have the right information, like a report. So, ask for one today and start your journey towards financial freedom and be credit savvy.