Understanding your credit report

Your credit rating is your history of repaying loans, credit cards or other financial obligations. It assesses your track record, the amount you currently owe, your payment amounts, and also it gives you an overall score.

Credit information is gathered by a credit reporting agency, sometimes called a credit bureau. There are two major credit reporting agencies in Canada: Equifax Canada Inc. and Trans Union. They are governed by federal and provincial laws and act as repositories where credit information on individual Canadians is stored and maintained for use by credit grantors.


What is a credit score?

A credit score is a snapshot of your credit picture at a particular point in time. It is an indicator of the risk level that you, as borrower, might represent, and is used to predict future performance. Your credit score will change as information is added, altered, or removed from the credit report. 

There are many types of credit scores; however the credit score used mostly by lenders is the FICO score. The FICO score, developed by Fair, Isaac and Company, Inc. is a number between 300 and 900 that lenders use to determine your credit rating. The higher your credit score, the better. In other words, the higher the score, the more likely you are to be approved for loans and receive favourable rates.


What can affect your credit score?

  • How much you are paying on your accounts and how long your accounts have been open.
  • How much you currently owe.
  • What different types of credit you use; how often you use them and how recent you have applied for credit.
  • How much credit you use compared to the amount available to you.


Who can access your credit file? 

A business may only obtain your credit file with your consent, after having told you it may be requesting it.  A business must have legitimate business reasons for wanting to access your credit file.


What can you do to maintain a good credit rating?

  • Pay your bills on time. Late payments, collections and bankruptcies have the greatest negative effect on your credit score. 
  • Watch your balances.  Keep your account balances below 50% of your available credit. For instance, if you have a credit card with a $1,000 limit, you should try to keep the balance owed below $500.
  • Check your credit periodically, adding comments or having inaccuracies corrected. Remember you have the right to dispute any misinformation on your credit report.
  • Be patient! Only responsible credit practices over time can repair credit history. You may also want to keep the oldest account on your credit profile open in order to lengthen your period of active credit use.
  • Avoid excessive inquiries. A large number of inquiries occurred over a short period of time may be interpreted as a sign that you are opening numerous credit accounts due to financial difficulties or overextending yourself by taking on more debt than you can easily repay.
  • Protect yourself from fraud.

 Your credit history is established by you and there are no shortcuts to erasing bad credit records. As a small business owner it is important to understand, build, monitor, protect and control the information in your credit file.


How do I get a copy of my Credit Report?

 You can obtain a copy of your credit report in one of four ways:

 1. Call one of the two Canadian credit reporting agencies, either Equifax Canada Inc. (1-800-465-7166) or Trans Union of Canada (1-800-663-9980).

 2. Write for a free copy to:

Equifax Canada Inc.Trans Union of Canada
Consumer Relations DepartmentPO Box 338 LCDI
P.O. Box 190, Jean Talon StationHamilton, Ontario
Montreal, Quebec L8L 7W2
H1S 2Z2 


3. Trans Union reports can be requested in person at a local Trans Union office with two pieces of valid ID, one of which must be government issued and not expired.  Make sure you have with you proof of full name, current address, date of birth and signature.  

4.  Via the Internet purchase for a fee your report at www.econsumer.equifax.ca or www.transunion.ca . The results are emailed to you in minutes.

NOTE: By mail or internet, you will need to provide identifying information. This is to ensure that your credit report remains private, secure and protected. By mail, the credit reporting agency will then mail you your report. If you choose to purchase your report on-line from Equifax, your personal information will be used for identity authentication. Once confirmed, your report will be returned to you within minutes.




Published by the Financial Consumer Agency of Canada, the document called Understanding your credit report and credit score is a comprehensive guide to both credit reporting agencies in Canada. 

Feel free to call our Business Counsellors for more information at 1-888-234-2232 or email us at msbc@cfib.ca . We are here to help!