What Is My Credit Report and How Do I Improve My Credit Rating?

Credit Ratings...

What is my Credit Rating Report?

The two largest credit reporting agencies in Canada are Equifax and TransUnion. These agencies are a repository of consumer credit information. They do not make any credit decisions, rate consumers, or grant credit.

The agencies receive information about you directly from you credit grantor, which is based solely on that grantor's experience with you. This information is then compiled by the agency in a Credit Report that is made available to the "members" of the credit granting agency, or to you, the debtor.

A copy of your Credit Report is free of charge if it is mailed to you via Canada Post, however there is a charge of approximately $15 if your credit report is requested over the internet.

How do I improve my Credit Rating?

The first step is to ensure that the information in your credit report is accurate. After that, the only way to improve your credit report is to use credit wisely. Wise use of credit includes:

• Do not apply for a myriad of credit sources. Limit yourself to two credit cards with small credit limits.
• Pay your bills on time. Work with your creditors to allow time to pass to show that your payment habits have improved.
• Be prepared to show the stability of your employment and your residence. Creditors want to know that you have a reliable source of income and that they can easily contact you if necessary.
• Get a secured credit card and be sure to pay the balance off every month.
• Keep an emergency store of cash to be used to pay your living expenses if something goes seriously wrong with your income source.

Communicate with your Creditors...

If you run into temporary problems in paying your debts, it is best to talk to your creditors and inform them of your situation as soon as possible.

Let them know that that you fully intend to pay your bills, but, due to your current circumstances, you need a bit of leeway for a short period of time.

Most creditors are willing to negotiate a short term arrangement that will work for both of you, as long as you are sincere in your efforts to comply, and meet the payment schedule as arranged.