Your Credit Report Check-Up

Credit Report: Is an overview of your history with obtaining and using credit. Personal information can include a list of previous/current addresses and employers. Financial information in the report can include:

• Bank accounts, including non-sufficient fund (NSF) payments and bounced cheques
• Credit cards, lines of credit and loans
• Bankruptcy and debts that went to collections
• A list of people, companies, lenders, authorized organizations (i.e. a landlord you have given consent to) who have made inquiries about your credit, including yourself.

When you make a credit application for a loan, rental, credit card etc., the information gets shared with the credit reporting agencies - commonly referred to as Credit Bureaus (Equifax and Transunion). The information that is collected by the Bureaus is compiled into your credit report and your credit score is generated.

Information recorded on your credit report remains there for approximately six years.

Credit Rating: Each individual creditor that you have (student loans, credit card companies etc.) generates their own rating for you. Ideally you want to be rated a 1 on a scale of 0-9 for each of these creditors. A rating of 1 means that you pay the minimum monthly payment on time every month. The individual credit ratings are a component of your overall credit score.

Credit Score: This essentially assesses your risk; the higher the score, the lower the risk for the lender. A higher score means easier access to credit for you, lower interest rates and in some cases, with a very high score, an ability to negotiate exceptional terms and incentives. You want to have a score of at least 650 or more on a scale from 300-900.

Did You Know? Paying for a cellphone or internet provider helps improve your credit rating and they are considered creditors just like a credit card! What does this mean? Students who pay these bills on time are building up their credit scores early! Check out the future benefits that make understanding credit worthwhile!

You need to be rated a “1” among creditors to have a very high credit score. There isn't much you need to do other than make the minimum payments before the due date every month. You only need to use your credit card once every six months to keep it active. As long as you pay off the minimum every month, the companies will report your good habits.

However, you may be in a situation where your score has been damaged severely, or you have been denied a major credit card from your banking institution. If that’s the case, there are definitely some alternatives for you.

1. Secured Credit Card: You will need to deposit money (between $500 and $1000) to serve as collateral. After you make regular payments on your purchases, the company will refund you the initial deposit and will revert you back to an unsecured credit card (such as a major credit card from your bank without a deposit requirement).
2. Retail Credit Card: If you've been turned down by Visa or MasterCard, consider applying for a retail credit card. Major retailers tend to be a bit more lenient but have higher interest rates (29.9% being very common). As long as you pay off your balance in full, it will not be an issue. After using a retail card responsibly for a period of time (a year or more), reapply for a bank credit card with a lower interest rate.
3. Piggyback: A friend or relative can place you on their card as a secondary user. This method requires both parties to trust each other. You can either hurt or help each other depending on your habits, because the credit of one party directly affects the other. As a secondary user, you don’t need to use your card to benefit from the primary user’s good credit. Once you use this credit card responsibly, or reap the benefits of the primary user's repayment habits, reapply for a bank credit card and use it responsibly.

How can having a healthy credit report help you?

• It can lower interest rates on a loan.
• It is often required when renting an apartment or home.
• It allows you to obtain better insurance rates (i.e. mortgage or car) which could potentially save you thousands of dollars!
• It can be used as a tool to renegotiate fees (i.e. bank account fees, interest rates, overdraft costs, length of grace periods).
• You may be applicable for rewards such as bonuses, cash back and travel points.
• It can be helpful when trying to get approval for higher limits on loans or credit.

Some of these may not help you right now but the responsible habits you’re practicing now will pay dividends in the not so distant future.

You can obtain your credit report for FREE by ordering via mail, fax, by phone or in person. You can receive it by mail or in person. To access your report online, you will be asked to pay a fee.

Your credit score is NOT included in the free credit report. There is an additional fee to get your credit score within your credit report. We will outline the different ways of obtaining a credit report below.