Getting your credit score, and your credit report, is much easier for Canadians than it has ever been before.
There are two primary credit bureaus in Canada: Equifax and TransUnion. Canadian legislation requires that they provide you, for free but only at your request, with a credit report once a year. Neither are required to provide you with your credit score. Both will do so, but only if you want to pay them to see it!
What’s a credit report?
Your credit report is simply a snapshot of your credit file, which is created when you borrow money or apply for credit. Credit card and loan companies you deal with will regularly update and send financial information related to your transactions to the credit bureaus. Your credit report, which is ongoing and evergreen, is is one of the main tools a lender uses when deciding whether or not to give you credit.
What’s a credit score?
Your credit score is a credit bureau’s or lender’s judgment about your overall financial health at a given point in time. It also represents to them the relative risk of lending to you, compared with other consumers.
Equifax and TransUnion use a scale from 300 to 900. An excellent credit score is anything in the high 700s or above. The higher your score, the lower the risk for the lender. They can use this in determining whether to lend to you or not, how much they want to lend to you, and at what rate.
Why should I care?
Establishing good credit is very important – vital, actually – if you want to apply and get approved for a loan or a credit card. If you know or suspect your previous credit history is not-so-great, you’ll want to check if things have improved. In addition to knowing your credit score, it’s a great idea to look at your actual credit report to see the status and specific details concerning your various accounts. Note that if you see any errors in the report, you’ll need to contact the relevant credit bureau directly to provide them with the information they need to correct it.
OK, I want to see these! How can I get them for free?
I thought you’d never ask.
As mentioned earlier, you can contact each of the credit bureaus directly once a year to get your free credit report, which they will send to you by slow, old-fashioned snail-mail. If you go online, they will also offer you a service (for $$$ of course) if you want to receive your report, and your credit score, instantly. Isn’t that nice of them?
Well, wait a minute. There are now numerous ways you can quickly get your credit report and score absolutely free. Yes, you heard that right. As Jed Clampett would muse, ‘the dickens you say!’
Here are a number of ways you can do it. Note that all of these are considered ‘soft hits’ on your credit file (rather than a ‘hard hit’ a lender might do if you were actually applying for credit). There’s no negative impact to you of viewing your credit info through any of these services.
The Chartered Banks
For RBC and ScotiaBank, credit scores are provided through TransUnion’s CreditView service. CIBC on the other hand has partnered with a third party provider, Borrowell, to provide clients credit scores through Equifax.
Third Party Services
OK, so your bank doesn’t offer you this service yet? It’s a competitive industry, so don’t worry, they will – just give them time. In the meantime, try these others:
Credit Karma – If you sign up with Credit Karma, they will provide you with your TransUnion credit report and score for free, and can also provide you with periodic updates / monitoring (also for free).
Borrowell – Borrowell will provide you, for free, with your Equifax credit score as well as ongoing credit monitoring. They do not currently provide you with your actual credit report.
MOGO – MOGO will provide you, yep for free, with your Equifax credit score and monthly updates. They do not currently provide you with your actual credit report. You can also buy and sell Bitcoin through MOGO…which I do NOT recommend. Cyrpto-currency ‘investing’ may be the subject of a future blog post.
Ratehub – Ratehub will provide you with your Equifax credit score for free. They do not currently provide you with your actual credit report.
What’s the Catch?
Well you knew it was coming. For the third party services, while the information they’re giving you is absolutely free, they’re looking to develop a business relationship with you. They might offer you personal loans, or present you with credit card offers. These might be their own products, or products that they offer through partners and affiliates. In any case, it’s not a big deal. There is really no pressure to use their supplementary services, and I’ve found they won’t overly bombard you or your email in-basket. Usually you’ll get one email a month with your credit update, and any offers they might wish you to consider would likely be part of that.
Pretty cool, eh? So go ahead. If your bank currently offers this through your online banking, that’s the best place to start. And if you need your credit report or are looking for free ongoing credit monitoring or montly updates, you can give one of the third-party services a try.
Let me know how it works out! Leave your experiences and your tips in the comments section.