Ever check your credit rating?
Got any loans? How's your credit rating?
It was one of those things that one intends to, but never get around to
actually doing, right?.
The credit recording companies/agencies are required to provide you with
your credit record information, free, by law.
So, after nearly 50 years working and living in Canada I checked mine, for
free, for the first time.
The procedure requires you to make a request proving your identity and the
information is mailed to you within a few weeks.
You have to be careful requesting because some 'Free' offer information is
packaged with some additional information from Equifax and others that they
WILL charge you for!
Fortunately my record was clean, very clean.
But there were a few minor errors.
The two significant ones were;
!) My 'current' mailing address, which was merely a change of a PO Box
number, caused by Canada Post installing additional boxes, some three to
four years ago was shown as my 'Previous Address'. I corrected it. BTW some
organisations, including on occasion the government, have difficulty with
the concept that your street or civic address (where you actually live!) may
not be the same as one's mailing address! And may mix up the info, use the
wrong postal code etc.
I don't know why? Maybe some think that everyone has mail delivery to one's
door?
2) One very ordinary bank account that has never been in Overdraft for the
last ten/twenty years or longer was shown as "Too new/recent to be rated".
Oddly I have had this account with the same bank since August 1956! I
questioned the statement and was referred to 'my' bank. But I could never
get through to a live person at that bank, at a convenient time, to ask
about it.
What the heck! It doesn't affect the rating anyway; but just demonstrates
what can be misquoted?
Something else I learned was that every time someone else (not if you) makes
a check on your credit rating it can affect how it's rated!
In other words; say you are carefully 'shopping around' for a better
mortgage, student loan or the best line of credit or personal loan interest
rate etc. The several enquiries that various financial institutions may make
may actually lower your credit rating!
So if/when you are sitting across from your 'friendly' financial officer at
'your' bank and they check your credit rating on the computer screen you
can't quite see from where you are sitting, it may be adding a demerit point
or two. Merely by asking?
This is hard to understand because presumably shopping around to borrow
money at the most advantageous interest rate and terms is, like any
contemplated purchase, demonstrating that one is a prudent consumer? Aha!
But they want to lend you money at the highest rate possible?
So there is a procedure for inputting corrections. I.e. you can challenge
the information that the credit recording agencies have about your financial
dealings.
Many years ago I was hired for a job involving much travelling and
entertaining and applied for an American Express (which was the favoured one
at the time) Credit Card. Was refused because I had at that time no debt or
history of debt and therefore no credit rating!
Different these days; not a month goes by that somebody, including AMEX
isn't trying to open a card account with incentives to lend me something!
This even includes banks I already deal with. To whom I would say, "Why are
you trying to 'sell' me another credit card? Don't you see my monthly
payment of the card balance of the card you already sold me?".
The 'come on' from some institutions, trying to lend you money, are almost
like a piece of chewing gum stuck to your shoe that you think you got rid
of! You scrape it off the shoe and it sticks to your pants, fingers etc.
Viz. A couple of months later I get spam email or postal mailing for the
same thing from the same financial institutions!
-We recommend that every Canadian order their FREE credit reports from
both Equifax ( www.equifax.ca ) and TransUnion ( www.tuc.ca ).
Address and employment are very common errors.
-The only way that a company can inquire into your account is by your
written authorization. The federal PIPEDA act is very strong on this.
I recommend that a person ask the lender if there is a good chance
that the lender is going to approve your loan. If there is a good
chance, then you can authorize them to make an inquiry on your
account. It costs approximately 6 points on your credit score for
each inquiry made.
-Too many inquiries makes it look like your credit shopping. This
means that you're trying to take on too much credit and/or are not
stable with your current credit facilitiesBy law, everything on your credit report must be accurate complete and
verifiable or it must be deleted. Feel free to dispute any item on
your credit report by law. This means that if a collection item is
incorrect, or even a bankruptcy item is incorrect, you are able to
dispute it by law and have it deleted.
-If your credit score is approx 700+ you'll start to receive benefits
such as lower interest rates and no money down mortgages. It's
important to keep this in mind as you apply to different lenders.
The RoyalBank and American Express use TransUnion Canada as their
credit reporting agency. Most every other financial institution in
Canada uses Equifax. That's why it's important to order your
TransUnion Canada and Equifax Canada credit report. You need to know
what's on both credit reports.
There is much the lenders and credit bureaus don't tell you.
-I believe there's an option to have them mail a free
version of their report to you. Their online versions
are what they charge for, IIRC.
What irks me is the nonsense that doing a credit check
will actually lower your score. Typical.
And Monty, what your "business" offers for hundreds of
dollars can be done by anyone. Contact reporting agencies
to correct false information on any credit reports, be
responsible with credit and never miss your payments.
There, that'll be $900 please.
-Nobody likes to give things away for free. However, because it's
legislated that they give you your free credit reports, they have to.
They don't make the address public. I'm just trying to get the word
out to everyone in Canada. See my website for instructions on the ID
required to order your credit report.