Your credit card report in Canada entails the credit history of your credit transactions and it highlights the times when you indulged in debt or credit transactions. When you need to take out a credit line or loan from a financial institution, the lender will assess your creditworthiness and then approve you for the loan.
A person who peeks a look at your credit report in Canada will see the timeline of your credit accounts, how much credit you have paid and how much is still pending if you are a punctual bill payer, and how much credit limit you have exhausted.
The Contents of a Credit Card Report in Canada
A typical credit card report in Canada includes the following information:
The below are the various credit score ranges.
741 – 900 = Excellent
690 – 740 = Good
660 – 689 = Average or Fair
575 – 659 = Below Average
300 – 574 = Poor
A personal description generally includes DOB, name, current and past addresses, SIN (Social Insurance Number), current and previous employment, telephone numbers, etc.
Credit Accounts and Their History
This lists out the credit accounts that are under your possession which includes loans, credit lines, retail or store cards, and mobile phone contracts. It also mentions the time at which you opened a credit account and the payment history related to it and the time when you closed it.
Collections and Public Records
This information consists of lawsuits and bankruptcies. If you are imposed with a lien against any assets or are deemed as the collections agency, this will also go on the record.
If you find mistakes on your credit report, you can request the credit bureaus to include a consumer statement on your credit report. This helps you to define a correction or negative information on your credit report.
Inquiries Related to Credit Report
If an organization or individual raises queries related to your credit report, it will also go on the record. If someone wants a copy of your credit report, they will need permission from you to do so.
For instance, when you get a new credit card, the institutions will ask for a credit check consent, which you will find on your application form. You can also see “soft inquiries” which are not visible to your creditors.
How to Interpret the TransUnion and Equifax Credit Reports?
On acquiring a credit report from TransUnion or Equifax, you will come across a lot of coding that interprets different things on the credit report regarding your score. This letter code stands for:
I- This entails the installment loans like a mortgage or car loan. You pay back these pans in installments every month or term, and these are struck off once you pay back your debt in full. Mortgages are also referred to by the letter “M”.
O- This is an open credit facility that shows when you borrowed money up to a certain limit. The best example is taking out a line of credit.
R- This refers to the recurring or revolving credit. This credit allows you to borrow money up to a limit. You will have to pay interest and a minimum balance based on your credit balance. The best example is a credit card.
On the other hand, the number cards entail.
0- This means the account is not yet in use or very new for a rating.
1- Amount paid upon billing or within a stipulated time.
2- A late payment of up to 59 or 31 days.
3- Late payments that are 89 to 60 days due.
4- Late payments that are 119 to 90 days late.
5- 120+ days late payments, but not labeled a “9”.
6- Number code out of use.
7- Account paid with a debt management program, consolidation order or consumer proposal.
9- Bad debt, sent to collection or the person has announced bankruptcy.
A combination example of number and letter code is:
R1- This means the credit card account is having a good record because the holder is punctual on payments and has no outstanding balances that are due.
Will Negative Information Reflect on Your Credit Card for a Long Time?
“Negative information” means the info in the credit card that reduces your credit rating. As per the law, the negative information reflects on the credit card only for a selected number of years.
Generally, the negative information stays for not more than 6 years, but the time frame can extend on the basis of the credit bureau that it belongs to. For instance:
- Consumer Proposal: 3 years.
- Judgments: This will be on your record for 6 years. But TransUnion may keep this record for 7 years in Ontario, New Brunswick, Quebec, Newfoundland, Labrador. And 10 years in Princ Island.
- Inquiries: TransUnion for 6 years, and Equifax for 3 years.
- Collections and closed bank accounts: The fraud or unpaid debt of the owner or NSF will stay on the record of the owner for 6 years.
- Bankruptcy: 6 years for TransUnion and 7 years in NVB, NL, ON, Que, and more than one bankruptcy will stay on the file for over 14 years.
- Consumer proposal: 3 years.
Credit bureaus also decide dates that might vary. You can check the Financial Consumer Agency of Canada’s list to know more about this. Why is it crucial to know about credit card reports in Canada? It is because you need an impeccable record and good creditworthiness if you are seeking out a loan or want to open a new account in any bank.
A bad record means more wait, more formalities, and more rejection. A credit report helps keep track of the changes in your score and helps you find out the gaps that might undermine your process of getting a line of credit.
With a good credit report, you will be an ideal candidate for the bank to approve any loan. It also helps avoid fraud and theft that is carried out on your credit and name. Hence, if you see any mistakes or unknown transactions in your record, you can report them immediately and maintain your goodwill with the banks and financial institutions.