An excellent credit score allows you to access the best credit cards, loans and mortgages with attractive rates and rewards.

But did you know that your credit score is calculated using information from your credit report?

In this guide, you’ll better understand Canadian credit reports so you’ll be able to manage your finances better.

Here’s everything that we’ll cover:

What is a credit report?

A credit report summarizes how you manage credit and your financial obligations. Credit bureaus, also known as credit reporting agencies, record your credit history, which is how you use credit products such as credit cards and loans. This information is sent from lenders to your credit report, which companies can use to make decisions about you.

A credit report summarizes how you manage credit and your financial obligations.

Credit reports keep a comprehensive record of your personal and financial history, including:

  • Your name, address and date of birth.
  • Your history of employment.
  • Your credit history: credit accounts, transactions, balances, and missed or late payments.
  • Defaulted or closed accounts.
  • Debts sent to collection agencies.
  • Banking information, including non-sufficient funds payments.
  • Public records, such as court decisions, bankruptcies or a lien against your house or car.
  • Inquiries from companies who’ve requested a copy of your credit report.
An Equifax credit report

A credit report can help you:

  • Understand how credit products and your financial behaviour affect your credit.
  • Make better financial decisions.
  • Take steps to improve your credit.
  • Protect against identity theft and fraud.

What are credit reports used for?

Credit reports are used, among other things, to decide on whether to lend money, extend credit, employment and rental tenants. There are other uses too, such as aiding the collection of a debt or offering insurance.

Credit reports are used to decide on whether to lend money.

Because so many companies rely on credit reports to make decisions about you, it’s crucial to regularly check your credit report to ensure it’s up to date, especially before applying for things like a mortgage, car, or loan.

Although lenders strive to report accurate information, errors can occur, so don’t just assume your report is correct.

Who can access my credit report?

There are rules on who can view your credit report and how they can use the information.

If you give consent, your credit report can be accessed by:

  • Banks
  • Credit unions
  • Financial institutions
  • Credit card companies
  • Finance companies
  • Retailers
  • Utility companies
  • Insurance companies
  • Mortgage companies
  • Government agencies
  • Debt collection agencies
  • Employers
  • Landlords

When you apply for credit, you consent for the lender or creditor to access your credit report to consider your application. This initial consent also allows access throughout the lifetime of the credit account. It also allows the lender to report account information to the credit bureaus.

A company must have a legitimate and permissible purpose for accessing a credit report, such as the extension of credit, employment, tenancy, insurance or debt collection.

Some provincial laws allow government representatives like judges and police to see parts of your credit report without your consent.

When a company looks at your credit report, it’s recorded in the inquiries section of your credit report.

When a company looks at your credit report, it’s recorded in the inquiries section of your credit report.

Source: Equifax Canada: Who can access my credit report?

In some parts of Canada, your credit score cannot be used to decide whether you qualify for insurance or to determine how much you will be charged for insurance coverage. Some provinces forbid insurance companies to use your credit score when evaluating your car or mortgage insurance application.

Some provinces also require companies to tell you if your credit report resulted in you being refused a benefit or service or if you have to pay more for it.

Source: Government of Canada: Credit report and score basics

Does my credit report show my credit score?

Typically, you’ll discover that your credit report contains your credit score. This is a number between 300 and 900 calculated using information from your credit report. Your credit score represents the likelihood of you paying credit back.

An example of a Equifax credit score

Do you have bad credit? Learn how to improve your credit score.

What’s in my credit report?

Your credit report contains personal information such as your name, date of birth, Social Insurance Number (SIN), historical addresses, telephone number and your current/previous employers.

Personal information is included in your consumer proposal

If you see another person’s personal information, it could mean that someone else’s credit information is linked to your credit report. If you think this is the case, report the error to the credit bureaus.

Your credit history is included in your credit report and contains the following information:

Credit accounts

Credit accounts are the types of credit you use, such as a credit card or a loan. Your credit report contains information about each credit account, including how long the account has been open, the balanced owed and whether you are within your credit limit.

As discussed further below, each account will also hold information about whether you make payments on time, miss payments, or if the debt has been passed to a collection agency.

There are different types of credit accounts: revolving, installment, open and mortgage.

There are different types of credit accounts: revolving, installment, open and mortgage.

Installment credit

Installment credit involves making fixed payments over a set term. Examples include mortgages, car loans, student loans and personal loans.

Revolving credit

Revolving credit describes products that you can reuse if the account is open and payments are made on time. Examples include credit cards, home equity lines of credit (HELOC) and other lines of credit.

Open credit

Open credit refers to accounts you can borrow from up to a certain limit but must be paid every month. An example is a mobile phone account, where you can make calls, send texts, and use data, but you must pay for these services at the end of the month plus any additional fees accumulated.

Mortgage loans

Mortgage information is recorded separately in your credit report.

If you use a home equity line of credit (HELOC), it may be treated as part of your mortgage in your credit report.

Payment history

Each credit account uses credit ratings to record whether you make your payments on time. These ratings use a letter to describe the type of credit:

  • I: Installment credit (e.g. loan)
  • R: Revolving credit (e.g. credit card)
  • O: Open credit (e.g. a line of credit)
  • M: Mortgage loan (e.g. mortgage for your home)

The number reflects the health of the account:

  • 0: Too new to rate or not yet used.
  • 1: Paid within 30 days of billing or paid as agreed.
  • 2: Late payment: 31 to 59 days late.
  • 3: Late payment: 60 to 89 days late.
  • 4: Late payment: 90 to 119 days late
  • 5: Late payment: more than 120 days late.
  • 6: Code not used.
  • 7: Making payments through a consolidation order, orderly payment of debts, consumer proposal, debt management program or a credit counselling agency.
  • 8: Repossession.
  • 9: Written off as a bad debt, sent to a collection agency or included in bankruptcy.
Payment history on credit reports

Any number higher than 1 will negatively affect your credit score. The worst rating you can have is 9.

If you don’t make payments on time, a higher number code will be applied, negatively affecting your credit score.

Paying bills within 30 days of the billing date will help you achieve a strong credit score.

Some examples:

  • If you pay a credit card bill on time, it’s reported as R1.
  • If you pay a loan installment 50 days late, it’s reported as I2.
  • If you have a credit card debt with a collection agency, it’s reported as R9.
You receive an R1 credit rating if you pay your account within 30 days.

Simply put, credit ratings record payments made on time, late payments, missed payments, debts in collections and bankruptcies.

Payment history appears on your credit report for six years from the date reported. Late payments remain on your credit report even if you pay the overdue balance.

Defaulted or closed accounts

Any credit account that was closed due to an overdue balance may appear on your credit report for up to six years from the date of your final payment.

Banking items

Chequing and savings accounts closed “for cause” due to money owing or fraud committed appear on your credit report for up to six years.

myEquifax Canada: Banking Information

Although banking products like chequing and savings accounts don’t benefit your credit score, it will damage your credit score if your account is sent to a collection agency because of a debt owed.

Source: Equifax Canada: How long does information stay on my credit report

Debts sent to collection agencies

If you fail to make payments towards a credit account, the account can be charged off by the lender and passed to a collection agency.

Debts in collections damage your credit score and can result in legal action.

This negative information will appear on your credit report for six years from the date of your last payment, regardless of whether you pay the balance or not.

Nevertheless, paying collections stops further action, demonstrates accountability to future lenders, and may improve your credit score if you pay before the six-year period is up.

Public records and other information

The public records section of your credit report holds pieces of financial information that are also on file with the government and accessible to the general public. This information is recorded, so lenders understand your creditworthiness.

myEquifax Canada: Public Records

Public records appear on your credit report if you file for bankruptcy. Public records also occur if you enter into any of the following:

If a court issues a judgment against you or a lien against property such as your home or car, this information will be recorded in the public records section.

Bankruptcy

A first-time bankruptcy remains on your credit report Equifax or TransUnion credit report for at least six years from the date you are discharged.

On TransUnion credit reports, your bankruptcy will appear for seven years from the date you are discharged in the following provinces:

  • New Brunswick
  • Newfoundland and Labrador
  • Ontario
  • Prince Edward Island
  • Quebec

For subsequent bankruptcies, each bankruptcy will remain on your credit report for fourteen years.

Consumer proposal

A consumer proposal stays on your credit report for three years after completion—or six years from the date you filed (whichever comes first).

Voluntary deposit, Orderly Payment of Debts (OPD) or credit counselling

When you enter into a voluntary deposit, Orderly Payment of Debts (OPD) or credit counselling, the credit bureau will remove this information from your credit report three years after the date paid.

An Orderly Payment of Debts (OPD) isn’t reported on TransUnion credit reports.

Judgments and wage garnishments

Judgments are debts you owe because of a court action. Wage garnishments are court orders that allow creditors to seize a percentage of your income until they are paid back in full.

Both items remain on the public records section of your credit report for at least six years from the date filed.

Liens

A lien is a legal claim by a creditor to collect what is owed to them. It’s most commonly placed against property such as a home or car. When the debt is paid, the lien is removed.

A lien lasts for six years on Equifax credit reports. On TransUnion credit reports, it’s five years.

Secured loans

Secured loans are a type of loan that uses an asset as collateral, such as a vehicle or a property.

In Canada, a secured loan will appear on your credit report for six years from the date filed, except for Prince Edward Island, which is seven to ten years.

Special services

The special services section contains a record of any company performing a soft inquiry to locate you using the personal information in your credit report.

Consumer statement

You can add a consumer statement to your credit report to explain the circumstances surrounding your credit history. For example, if you have some late payments for a credit account, you may want to explain why so that lenders understand why this happened.

Why is this important? Instead of lenders only seeing the late payments, it allows you to clarify why it happened so that they can consider this when reviewing your credit. This is especially important at the moment because of the COVID-19 pandemic.

A consumer statement can be added to your credit report to explain the circumstances surrounding your credit history.

This statement can be seen by any company that receives a complete copy of your credit report. However, you can remove a consumer statement at any time.

Credit inquiries

The credit inquiries section lists any company that requests a copy of your credit report in the past three years. Simply put, this means that they’ve performed a credit check.

myEquifax Canada: Inquiries

There are two types of inquiries — hard and soft.

Hard inquiries

If you’ve applied for credit, a hard inquiry will occur to help lenders decide on your application. Hard inquiries can impact your credit score and remain on your credit report three years from the inquiry date.

Too many hard inquiries on your credit report can alarm lenders because it appears that you’re desperately looking for credit.

Soft inquiries

Soft inquiries are different because they are non-credit-related inquiries. An example of a soft inquiry is when an existing lender uses the information on your credit report to check if you qualify for a promotion, credit limit increase or service. Insurance companies and credit bureaus also use soft inquiries.

Soft inquiries do not affect your credit score and are not visible to anyone but you. They can take place without your permission.

When you check your credit score, this is a soft inquiry.

How many credit inquiries are too many?

Too many credit inquiries in a short space of time can indeed damage your credit score.

But the good news is that multiple applications for the same type of loan (such as car loans, mortgages and student loans) made within a short period — from 14 to 45 days — are combined. This means that although all inquiries will appear on your credit report, only one will affect your score.

Credit cards do not fall under this rule. Every credit card application involves a hard inquiry, which will damage your credit score.

Before you apply for credit, find out if the type of credit will be treated as a single inquiry.

Here’s a tip: If you’re applying for a car loan or a mortgage, try to do it within two weeks as they are usually combined and treated as a single inquiry.

Identity alert

Identity alerts encourage lenders in Canada to verify your identity before issuing credit. The process allows you to add a personal statement and phone number to your credit report. In some provinces, such as Manitoba and Ontario, this alert requires lenders to call you before extending credit.

Fraud alert

Fraud alerts are available to confirmed victims of fraud or identity theft. Like identity alerts, a statement can be added to your credit report to encourage — but not legally require — lenders to call you before approving credit. Fraud alerts stay on your report for six years.

How long does information stay on my credit report?

The length of time each item appears on your credit report will vary depending on the type of information and the credit bureau:

Time Start date
Credit transactions 6 years Equifax: from date of last activity.
TransUnion: from the date you first defaulted on the account.
Secured loans 6 years Equifax: from date of filing.
TransUnion: from date of first delinquency.
Banking items 6 years Equifax: from date of transaction or default.
TransUnion: from date of write-off or date closed, whichever is sooner.
Inquiries Equifax: 3 years.
TransUnion: 6 years
From the inquiry date.
Judgments 6 years.
TransUnion: 7 years in Ontario, Quebec, New Brunswick, Newfoundland and Labrador. 10 years in Prince Edward Island.
From the date of filing.
Charged-off accounts 6 years Equifax: from the date a debt is passed to a collection agency.
TransUnion: from the date the account became delinquent with the original lender.
Collections 6 years Equifax: from the date a debt is passed to a collection agency.
TransUnion: from the date the account became delinquent with the original lender.
Registered items
e.g. lien against property.
Equifax: 6 years.
TransUnion: 5 years
From the date of filing.
Bankruptcy 6 years.
TransUnion only: 7 years in Ontario, Quebec, New Brunswick, Newfoundland and Labrador, and Prince Edward Island.
From the date of discharge. If not discharged:
Equifax: maximum of 7 years from the filing date.
TransUnion:no time limit.
Multiple bankruptcies 14 years From the date of discharge for each bankruptcy.
Consumer proposal 3 years Equifax: from the date paid.
TransUnion: from date satisfied or 6 years from the filing date, whichever comes first. If not paid or satisfied, the maximum is 6 years from the filing date.
Orderly Payment of Debts (OPD) Equifax: 3 years.
TransUnion: not reported
Equifax: from date paid.
TransUnion: individual accounts included in OPD stay on file for 2 years from the date OPD is satisfied or 6 years from the date of first delinquency, whichever is sooner.
Debt Management Program (DMP) with a credit counselling agency Equifax: 3 years.
TransUnion: not reported
Equifax: from date paid. If not paid, a maximum of 6 years from the filing date.
TransUnion: individual accounts included in DMP stay on file for 2 years from the date DMP is satisfied or 6 years from the date of first delinquency, whichever is sooner.
Remarks, Consumer statements, Identity Alerts and Fraud Warnings 6 years From date reported to the credit bureau.

Source: Government of Canada

Check your credit report regularly to ensure any negative information falls off on time.

Positive information on a credit report

You want positive credit information to stay on your credit report for as long as possible. The good news is successfully paid credit accounts with no negative history can remain on your report for up to twenty years. This allows lenders to see that you managed the account successfully.

Negative information on a credit report

As discussed above, negative credit information on your credit report could be many things, such as a defaulted account or collection action. This information typically remains on your report for six years.

Who creates my credit report?

There are two major credit bureaus — also known as credit reporting agencies — in Canada: Equifax and TransUnion.

Credit reports in Canada: Equifax and TransUnion

Both companies collect and share information about how you use credit. They sell credit reports to banks, financial institutions and other companies so that these organizations can make decisions about you.

How often is my credit report updated?

Your credit report is typically updated at least once every 30 days. Lenders provide these updates by reporting new information, such as balances and payment activity, to the two main credit bureaus — Equifax and TransUnion.

Some lenders are more frequent than others and may report information multiple times in any given month, so check your report regularly.

How do I view my credit report?

You can obtain your credit report from Equifax or TransUnion, Canada’s two major credit bureaus.

Major credit bureaus in Canada: Equifax and TransUnion

They offer a free service that allows you to access your report online, by phone, mail, or in person.

You’ll want to request a report from both, as each bureau can hold different information about you.

Learn more: Check your credit report

How to check your credit report for errors

It’s crucial to check your credit report for errors. You should do this regularly to ensure your credit score doesn’t drop, resulting in you being turned down for credit.

How to check your credit report for errors

Pay particular attention to things like:

  • Incorrect personal information such as the wrong date of birth or address.
  • Misspellings of your name or address.
  • Accounts that don’t belong to you.
  • Unfamiliar accounts or credit inquiries (which could be a sign of identity theft).
  • Payments made on time but recorded as late.
  • Inaccurate credit limits.
  • Accounts attached to debt collection agencies.
  • Closed accounts reported as open.
  • Negative information that hasn’t fallen off when it should have.

Fixing errors can result in a significant improvement to your credit score. Your credit score isn’t affected when you check your own credit report.

How to dispute an error on your credit report

If there’s an error on your credit report, file a dispute with the credit bureaus if you spot an error.

Dispute information on your credit report:

You may need to provide receipts, statements or other evidence to support your claim. It’s also a good idea to contact the creditor who made the mistake to inform them.

Upon receiving your dispute, the credit bureau will check your claim by liaising with the lender that reported the information to them. This review takes around thirty days.

If it’s established that there’s is an error, the credit bureau will update your credit report.

If you are not satisfied, you can add a consumer statement to your credit report to explain the circumstances surrounding the issue so that future lenders can consider this when reviewing your credit report.

Check your credit report for fraud

If your credit score suddenly drops, access your credit report and look for anything suspicious such as accounts that you didn’t open or balances that aren’t correct. If you find any suspicious activity, report this to both Equifax and TransUnion.

After you’ve done so, review your statements and bank account activity for suspicious transactions. If you find any, alert the lender and your bank immediately and cancel the affected card. You should update your online credentials if necessary.

Then, contact the police and report the incident to the Canadian Anti-Fraud Centre.

How to set up a fraud alert or fraud warning

If you are the confirmed victim of fraud or identity theft on your credit file, regularly monitor your credit report and set up a fraud alert on your account. Fraud alerts encourage but don’t legally require lenders to call you before approving credit applications.

Set up a fraud alert with Equifax or TransUnion:

How to set up an identity alert

Regardless of whether you’ve been a victim of fraud or not, you can add an identity alert to encourage lenders in Canada to verify your identity before issuing credit. In some provinces, such as Manitoba and Ontario, this alert requires lenders to call you before extending credit.

Set up identity alerts with Equifax or TransUnion:

Frequently asked questions about credit reports

What is a credit bureau?

Credit bureaus, also known as credit reporting agencies, collect and store information about your credit use and financial history. Lenders and other companies provide this information. It’s a credit bureau’s task to compile the data and build a credit file from it.

Is my entire credit file on my credit report?

Not all companies report their accounts to credit bureaus for many reasons. Therefore, a credit report might not be a complete record of your credit and financial history. What’s more, TransUnion isn’t the only major credit bureau in Canada. Equifax may hold a credit file with different information.

Does Rodgers, Bell or Telus report to credit bureaus?

Not all financial products impact your credit, but telecommunications accounts that provide telephone, mobile and Internet influence your credit score.

Examples of telecommunications accounts are Rodgers, Bell and Telus.

So, you’ll want to make payments on time to ensure positive information is recorded on your credit report, which can improve your credit score.

Unfortunately, it will show up on your credit report if you make a late payment, which can lower your credit score. So always pay within thirty days of billing.

Can I get rid of bankruptcies on my credit report?

You must complete your bankruptcy then wait for it to fall off. There’s no other way.

If it’s your first bankruptcy, it will appear on your Equifax or TransUnion credit report for at least six years from the date you are discharged.

On TransUnion credit reports, your bankruptcy will appear for seven years from the date you are discharged in the following provinces:

  • New Brunswick
  • Newfoundland and Labrador
  • Ontario
  • Prince Edward Island
  • Quebec

If you’re not discharged, it will remain on your Equifax credit report for a maximum of seven years from the filing date. With TransUnion, there’s no time limit for bankruptcy that hasn’t been discharged.

If this is a second bankruptcy, it will remain on your report for fourteen years from the date of discharge.

See also: How will filing for bankruptcy affect my credit score?

Conclusion

By reading this guide, you should understand how credit reports work in Canada and how they are used.

The great thing about knowing what’s on your report is that it allows you to improve your credit score.

The bottom line: having a good credit score gives you access to better credit cards, loans and mortgages with attractive rates and rewards.

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