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Credit Reporting and Credit Repair

Whenever you apply for a car loan, rental agreement, mortgage or even a cable subscription, your financial institution, lender or service provider will likely want to see your credit report.  

What is a credit report?

A credit report (also known as a credit history) tells the story of your borrowing and payment habits. It can let lenders know if you pay your bills on time, how much debt you have and if you have ever missed a bill payment. Your credit report contains personal and financial information, including:

  • any credit in your name
  • past or current bankruptcies
  • debts that you did not pay
  • items in collection
  • judgments registered against you
  • any companies that have inquired or viewed your credit history

Your credit report should not contain:

  • Information about your gender identity or expression, sex, sexual orientation, political belief or activity, creed or religion, race, colour, ancestry or national origin.
  • Information about your health or medical history, including information about any physical or mental disability.
  • Details on account history if more than six years have elapsed since the date of the last payment on a debt.
  • Details of previous bankruptcies that fall into the following scenarios: (1) if you were bankrupt only once and discharged more than six years ago, or (2) information about your first bankruptcy if you were bankrupt twice, both bankruptcies have been discharged and more than six years have passed since the discharge of your first bankruptcy. 

Your credit report is created from the first time you apply for credit. Your creditors send information, usually once a month, to credit reporting agencies or credit bureaus to keep your report up to date.  

What is a credit reporting agency?

A credit reporting agency creates, maintains and collects information regarding your credit history from various sources, such as financial institutions, mortgage companies and credit card companies. The  Credit Reporting Services Act in New Brunswick ensures that credit reporting agencies collect, maintain and report your credit and personal information responsibly. 

The main credit reporting agencies in Canada are TransUnion and Equifax. The credit reporting agency must provide you with a report once per calendar year at no charge; however, you must request it from them. They may charge a fee for additional reports or information. 

Credit reports may also be available through third-party credit reporting agencies. Third-party agencies pull your information recorded by the two leading credit bureaus or through apps that partner with your financial institution. Be cautious when dealing with third-party agencies. Read the terms of service and research the provider before providing personal information to any agency.

Who can request a copy of your credit report?

With your consent, lenders and creditors, insurance companies, landlords and even potential employers can access your credit report. The information compiled assists these organizations in deciding when to give a consumer credit, tenancy or even insurance.

What is a credit score?

A credit score is a measure of how risky it would be to lend you money. The credit bureaus look at many factors to determine your score and create a three-digit number to represent you. This score typically ranges from 300 to 900.  Lenders consider people with higher scores to be lower risk as it means the person has a history of credit and making payments on time.  

How do I improve my score?

Having a good credit report may make it easier for you to receive loans, credit cards or rent apartments. You should always try and maintain good credit history. Often, the only way to improve a poor credit rating is to pay your debts and allow time to pass to show that your payment habits have improved.

Here are a few tips to help improve your credit score:

  • Maintain bills and payments on time and accurately.
  • Monitor your reports and making sure that any incorrect information is rectified as soon as possible.
  • Be aware of any credit or loan agreements, as a default in payment can harm your personal credit file.
  • If you think you will have trouble paying a bill, contact the lender right away. See if you can work out a special arrangement to repay your debt.
  • Don’t apply for credit too often and avoid going over your credit limit.

What about errors on my credit report?

You should verify that your personal information is up to date and contains no errors in the credit report you receive. It is important to check all credit reports carefully. Errors can include debts you have paid in full and incorrect personal or financial information. If you have concerns about the accuracy of your credit report information, you can request the credit reporting agency to correct the error. You may be required to provide proof of the error to the credit reporting agency. Upon your request, the credit reporting agency must then notify anyone who received a copy of the report that the information has been corrected. 

Thinking about hiring a credit repair company?

The thought of repairing your credit may be tempting, but there is risk involved with hiring a credit repair agency as they are not regulated, approved, registered, or licensed by the federal or provincial governments.  

If you decide to hire a credit repair agency, it’s important to understand your rights as a consumer: 

  • It is an offence for the credit repairer to require or accept payment or security for payment in advance of causing a material improvement to your credit report, credit information, file credit record, credit history or credit rating.
  • You may cancel a credit repair agreement up to 10 days after you receive the agreement by providing a notice of cancellation. The credit repair company has 15 days to provide a refund of any payment you made to them.

Other important information

Identity theft can happen at any time. If you believe that you have been a victim of identify fraud, you should contact Canada’s main credit reporting agencies, TransUnion and Equifax, to report to your file. You can also obtain other fraud information at: Reporting Fraud | New Brunswick Financial and Consumer Services Commission (FCNB).

You may also want to visit the Credit report and score basics page on the Government of Canada’s website.