Have you heard of a credit report before? Let’s break down what it is, how it helps and where you can get your credit report.
While you are reading this article, be sure to check out our Personal Finance Guides to understand Credit and Debt better.
What is a Credit Report?
There’s two things to note: a credit score and a credit report. A credit report contains your credit score. Simple right?
Credit reports are like scorecards that lenders use to measure a person’s reliability and responsibility with debt. The report includes the following information:
- Your personal information like name, birth date and addresses
- List of all credit accounts opened an/or closed including line of credits, loans, credit cards, student loans, mortgages and any form of debt
- Payment history for the credit accounts
- How much you owe on each credit account including your credit limit
- Overdue accounts that are with collections
- Information regarding past creditors that have accessed your report
A credit score is a snapshot in time representing the financial status of an individual and it is a number between 300 – 900. According to TransUnion, a credit score of 760+ is considered excellent.
In Canada, there are two credit bureaus – Equifax and TransUnion – not all lenders report to both. Thus, information may vary from one credit report to another depending on your lender’s reporting to the bureaus.
Why do credit reports matter and how do they help?
They matter because they help you borrow money for those larger purchases such as a home, or a business. Nowadays, it is common for employers, landlords, credit card companies, auto dealerships and government agencies to request a credit report to gauge your level of responsibility with money.
To simplify, they matter as the credit report helps you get the money you require for your financial goals. A high credit score will open doors to lower interest loans that allow you to decrease your cost of borrowing.
If you are looking for more ways to understand your credit, read more about how to build and improve your credit score.
Nothing is ever perfect, remember to check your report via a soft check to make sure the information is accurate. If you have any questions or mistakes, contact the credit bureau directly. The soft check will not affect your credit score and is available via bank apps.
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