Credit reports and scores

Your Details credit report is your record of creditworthiness and your View Details credit score is a number that summarizes the detailed information in your credit report. Lenders use credit reports and scores to evaluate your ability to make monthly payments on a timely basis. Whether or not you receive credit, how much credit you do receive and the interest rate you will pay are among the issues determined by the information found in your credit report.

Building and maintaining a good credit report can be a significant step in your personal and financial well-being. Even after you've established a good credit report, you should still check it periodically to make sure the information it contains is accurate.

It's easy to build credit, the trick is to build good credit. Establishing and maintaining a good credit report results from paying your bills consistently, on time and as agreed. Always pay at least the total minimum amount due, and always pay on time. Here are some additional tips that may help

• pay all your bills on time, such as rent, telephone, utilities, etc.
  
• open a chequing or savings account
  
• apply for a credit card or loan with the lowest possible interest rate
  
• keep your credit card balances to a minimum and avoid missing payments

Equifax Canada and TransUnion Canada maintain information about your View Details credit history and you have a right to see the information that is in your credit file. You can contact these credit bureaus to receive a copy of your credit report free of charge by mail or online for a fee. Visit External resources to link to their sites.

Some of the key lifestyle events that can cause lenders to review your credit report include 

• applying for a loan or credit card
  
• renting or buying a home
  
• applying for a job
  
• applying for a loan to purchase a car, large appliances or electronics

A credit score is an objective numerical value, usually ranging from 300 to 900, that summarizes the detailed information in your credit report. Different aspects of your credit report carry different numerical weights and a mathematical formula or computation determines your score. The credit industry applies thousands of score models, with different aspects of your report weighted differently, depending on your payment history and the type of credit being considered.

With credit scores, higher is better. The best thing you can do to maintain a high credit score is to pay your bills on time, limit your debt payments to less than 10% of your income and check your credit report regularly to correct any errors.

Learn more about maintaining good credit at Managing credit. Learn how to repair your credit history at Tackling debt.

If you receive a copy of your credit report and see that it includes incorrect information, or if you have been denied credit on the basis of credit report information you believe to be inaccurate, you can contact the credit reporting agency and request that the information be corrected. They will review your report, investigate your claim and make the correction if one is called for.

Visit External resources for links to Canada's credit agency sites.