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How Do I Read My Credit Report?

Evan Miersch

Jan 08, 2021 8 min read

Article Contents

    Your credit report paints a picture of how financially responsible you are. It shows what kind of credit products you use and how well you manage payments towards these products. It also shows how well you manage other bills and financial commitments. Canada’s two credit bureaus, Equifax and TransUnion, each compile credit reports for you based on your financial behaviour. You can use Borrowell to access your Equifax credit report for free. 

    Want to download and read your credit report?

    You can download your Equifax credit report for free by signing up for Borrowell. See what could be impacting your credit score and get personalized tips on how to improve your score.

    Download Your Credit Report

    You should regularly review your credit report, as lenders look at your report before approving you for credit products. Your credit report is also used to calculate your overall credit score, so you should make sure it's accurate. Reading your credit report can be overwhelming and confusing, but it doesn’t have to be! Here’s a clear breakdown of how to read your credit report, including what information is in it, what this information means, and how long this information stays on your report for.

    What Information Is in a Credit Report?

    First, you should understand what information exists in your credit report. Whether your report is from Equifax or TransUnion, you can expect your report to contain the following information.

    Personal Information

    At the top of your credit report, you will see your personal information that the credit bureau has collected. This information includes:

    • Your full name
    • Your SIN (social insurance number)
    • Your date of birth
    • Your current address
    • Previous addresses you lived at
    • Your current employment status, including your employer and occupation
    • A Consumer Statement you asked the credit bureau to add to your file (e.g. regarding a missed payment or a dispute you tried making on your credit report)

    When you apply for credit, this information is updated. So if you haven’t applied for a credit card or a loan in a while, this information may not be up to date. If you move or change jobs, it’s a good idea to review your credit report to make sure these changes have been made to your credit report. 

    Credit Information

    This section refers to any open or closed trades and credit accounts that appear on your credit report. Trades and credit accounts include loans, lines of credit, credit cards, and mortgages. For each account on your credit report, you can see information such as:

    • The type of account
    • When the account was opened
    • How long the account’s been opened
    • The status of the account
    • Your payment history on the account
    • Your payment schedule
    • The credit limit of the account, where applicable
    • Your last payment amount
    • The current balance on the account
    • Any amounts past due on the account
    • The most recent activity date on the account
    • The most recent date reported on the account

    Lenders share the information above with credit bureaus, and they use standard codes to report your credit accounts and your payments. Each code contains two key identifiers:

    • A letter that shows the type of credit account
    • A number that shows when you make payments

    For example, a credit card account that you paid on time will be reported as “R1”, while an installment loan with a 30 day overdue payment will be reported as “I2”.  

    Here’s what the different letter and number identifiers are and what they mean:

    Revolving Credit (R)

    With revolving credit, you have a set credit limit that you can borrow up to on an ongoing basis. You make regular payments of various amounts depending on the balance of your account. Examples of revolving credit include credit cards and lines of credit from a bank or lender.

    Installment Credit (I)

    Installment credit involves borrowing a fixed amount of money. You have regular payments that you pay over a specific amount of time until the loan is paid off. Examples of installment loans include car loans and student loans.

    Open Status Credit (O)

    Open status accounts on your credit report will include anything like mobile phone accounts or a utility bill.

    Mortgage Loan (M)

    If you’ve taken out a mortgage to purchase a home, your mortgage amount may show on your credit report. However, the specific mortgage provider will not be shown on your report.

    Payment Ratings (1-9)

    Each trade and account on your credit report includes a rating between 1 and 9. This indicates when you made a payment on the account. A rating of 1 means you made a payment on-time. Any number higher than 1 indicates a late payment, which will likely hurt your credit score. Here’s what the different number ratings mean:

    • 1 - Paid in full as agreed, within 30 days of billing
    • 2 - Late payment; 31-59 days late
    • 3 - Late payment; 60-89 days late
    • 4 - Late payment; 90-119 days late
    • 5 - Late payment; more than 120 days late, but not yet rated“9”
    • 6 - This code is not used
    • 7 - Regular payments under a consolidation order, Orderly Payment of Debts, consumer proposal, or Debt Management Program with a credit counselling agency
    • 8 - Repossession of property
    • 9 - Charged-off account written sent to a collection agency, or bankruptcy

    It’s helpful to understand how to read your trades and accounts. Seeing all your information in one place can help you to keep track of your different accounts and spot any errors.

    Credit Inquiries 

    This section of your report shows any credit inquiries that have been generated on your file. Credit inquiries are generated when lenders or other companies request your credit report. These are known as credit checks, and they’re used to determine your creditworthiness before approving you for products.

    You should review this section to make sure all the inquiries listed are ones that you have agreed to. A credit check that you don’t recognize could indicate suspicious activity on your file, such as identity theft. 

    You should also know the differences between “hard” and “soft” credit inquiries. A “hard” inquiry is the type of inquiry done by banks and lenders. Hard inquiries appear on your credit report and are visible to anyone who has access to your report. Hard inquiries can temporarily impact your credit score. 

    A “soft” inquiry is when you check your score or pull your credit report yourself. Soft inquiries show up on your credit report, but they are only visible to you, and they do not impact your credit score. For example, checking your free credit score with Borrowell is an example of a soft credit inquiry that won’t impact your credit score!

    Lenders who view your credit report may be concerned if there are too many hard credit inquiries on your credit report. It may look like you’re urgently applying for credit, or that you’re trying to live beyond your means by taking out too many credit products.

    Collections

    If you have any collections on your credit report, they will show in this section. When payments on accounts become seriously overdue, they may be sent to an external collections agency in order to track down those missed payments. Once an account has been sold or passed to a collection agency, it can be reported in this distinct section on your credit report. This section will include information about the account and how large the outstanding balance is.

    Having a collections mark on your credit report can significantly decrease your credit score, which is why it’s so important to make on time payments

    Public Records

    This section shows any publicly available legal items or court rulings that are relevant to your financial profile. This section will be empty if there are no public records on file.  Here are examples of public records that could appear on your credit report.

    Bankruptcy & Consumer Proposals

    If you’ve filed for bankruptcy or a consumer proposal, they will appear in this section of your credit report. Filing for bankruptcy is when you can’t pay your outstanding debts, whereas a consumer proposal is a legally binding agreement where you submit a “proposal” of paying off some of the debt to creditors. Each of these will have a serious impact on your credit score. 

    Credit Counseling

    Credit counseling services that you’ve received will appear here in your credit report. This includes working with a credit counselor to pay unsecured debts through a debt management plan.

    Judgments

    Judgments are payments or debts you owe because of a court action or lawsuit. For example, if somebody sues you and you lose, this debt may show up in your credit report.

    How Long Does Information Stay on My Credit Report?

    In general, most negative information stays on your credit report for 6-7 years. There are many different items that you may see on your credit report, and each has a different expiry date. For example, a consumer proposal will be removed from your credit report three years after it’s been paid off. Late payments stay on your credit report for up to 6 years from the date reported. Other information can remain on your credit report for longer, so it’s important to check how long your credit information has been on your report. 

    If you’ve found outdated credit information, or if you spot an error, you can dispute the information on your credit report. This involves providing an investigation request form and supporting documents to either Equifax or TranUnion through mail or online. These credit bureaus are legally required to maintain accurate information on your credit report and investigate any disputes. Errors on your credit report can have a negative impact on your credit score, so it’s important that all your information is accurate and up-to-date.

    Who Can See My Credit Score and Report?

    Organizations that may request to see your credit score and report include:

    • Lenders
    • Credit card companies
    • Car dealerships
    • Retailers
    • Rental companies
    • Utility providers
    • Phone, cable, and internet providers
    • Insurance companies
    • Employers
    • Landlords
    • Collection agencies

    When you apply for certain products or services, the company you’re applying with will ask to make a credit inquiry so they can review your credit score and credit report. This helps them decide whether to approve your application, lend you money, provide you with services, or other decisions. Because of this, it’s important that you know what your credit report looks like before others see it.

    Your credit report isn’t publicly available; you need to grant permission to individuals or companies who request to view your credit report. 

    The Bottom Line

    Your credit report has a ton of information that demonstrates how responsible you are with finances. Reviewing your credit report regularly can help you understand what lenders think of you when you apply for credit. Reading your credit report can be daunting, but the information above can help you make sense of all the details displayed on your report. 

    Are you ready to review your credit report? Sign up for Borrowell and access your credit score and Equifax credit report for free!

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