How to Check Your Credit Score and Rebuild Your Credit History in Canada
Your credit score is vital when it comes to securing financial services in Canada. It’s a three-digit number that determines your creditworthiness and the likelihood of you repaying your debts. Checking your credit score and credit report is critical to ensure there are no errors or signs of fraud.
Canada has two primary credit bureaus: Equifax and TransUnion. They update your credit score regularly based on the information provided to them by your creditors. The higher your score, the more creditworthy you become, and the higher the chances you have of securing loans at better interest rates.
How to Check Your Credit Score
To check your credit score, you can contact either one of Canada’s two credit bureaus directly. Equifax offers a free credit report and score via phone, mail, or an online form. On the other hand, TransUnion provides a free credit report that they call “consumer disclosure” and charges an extra fee for credit scores if you aren’t a Quebec resident. You can also use free Canadian personal finance websites or some banks, like RBC and CIBC, who provide clients with a free credit score for online banking.
Soft vs. Hard Check
There are two types of credit inquiries; hard checks and soft checks. Hard checks can negatively affect your credit score because they show active requests for credit, while soft checks don’t show up on your credit report. When you request a copy of your credit report or score, it’s considered a soft check and won’t affect your score.
Rebuilding Your Credit History
Rebuilding your credit score and credit history takes time but is entirely possible. A secured credit card can be helpful as it’s easy to acquire, and responsible usage can increase your score. Making timely payments is crucial as it’s the most important factor in your credit score. Try to avoid closing old credit card accounts as it can be detrimental to your credit history. Instead, negotiate with your creditors to have your debts removed.
Why TransUnion and Equifax Scores Differ
Credit scores may vary slightly between TransUnion and Equifax because they prioritize different metrics during their assessment. Additionally, creditors may choose to report to only one credit bureau, which can cause score differences.
Foreign Credit Scores in Canada
Your credit score as reported by TransUnion or Equifax applies only in Canada. If you move to another country, you’ll have to build a new credit score from scratch. However, lenders in other countries will have access to your Canadian credit history, which could affect your chances of acquiring credit in your new country.
Checking and Rebuilding Your Credit Score is Essential
Maintaining a good credit score is essential when seeking financial services in Canada. Checking your credit score regularly and rebuilding it appropriately is the best way to secure the services you need. Follow the suggestions mentioned above and work towards becoming financially healthy.
