Canadian Credit History

Canadian Credit History Explained

Everyone has a blank credit history or credit file until they apply for credit or borrow money. As soon as a loan or credit card is granted, the three major Canadian credit bureaus begin adding information to your file. This information becomes your Canadian credit history.

Your credit history contains detailed information about your financial history. Information in a credit file may include, but is not limited to:

• A listing of your credit cards, loans, and other lines of credit
• A payment history for every line of credit indicating whether or not you have paid on time.
• Collection agency debt or debt settlements
• Bankruptcy declarations

Good Credit vs. Bad Credit

Having a good Canadian credit history is important for individuals who are living in Canada or for individuals who plan to move from Canada to the U.S. (your credit history does follow you when you move). Lenders and other creditors will be unwilling to give you a line of credit if you have a poor payment history.

With a less than stellar Canadian credit history, you may also find it difficult to:

• Qualify for Fair Rates – Financial institutions use your credit history to establish the interest rate you pay on credit cards and loans.
• Get Good Loan Terms – Borrowers who have bad credit are often subject to prepayment penalties and other undesirable terms.
• Find a Job – Many employers now look at credit history during the hiring process; you might miss out on a job if your credit history has been damaged.

Canadian Credit History Report

To get an idea of what your credit history looks like, most lenders and credit grantors will request a Canadian credit history report from one of the three major credit bureaus. The credit report will contain:

• Personal Information - The personal information included in the report identifies who you are with key identification stats like your name, address, birth date, and Social Insurance Number (SIN).

• Inquiries – Credit reporting bureaus keep track of who has been looking at your credit report. The inquiries section of your Canadian credit history report will list all of the different individuals and organization that have requested a copy of you credit report in the last three year period.

• Public Information – Public record information contained in your credit report includes information about bankruptcies, judgments, and secured loans (i.e. a home loan, auto loan, etc.)

• Third Party Information – If you have any unpaid debts sent to a collection agency, or if you are currently trying to settle a debt with a collection agency, this type of information will also appear in the third-party section of your credit report.

• Trade Information – Trade information encompasses details about your credit transactions and payment history. Credit grantors assign industry standard ratings to indicate whether you pay on time, pay late, or don't pay at all.

• Consumer Statement – This portion of the credit report is reserved for any comments you want to make about the other information that can be found in your credit file. For example, if you have bad credit due to an illness, job loss, or other extenuating circumstances, you can have it noted in the consumer statement. This will serve as an explanation for your credit rating, and may help credit grantors or employers understand why you fell behind.

If you are interested in seeing what your Canadian credit history report looks like, you can contact one of the three Canadian credit bureaus.

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