Jun 30, 2023
How the credit bureau gathers your info
Whether you’re applying for a consumer loan or a mortgage loan, every lender will request your credit report, which is an indicator of how you pay your outstanding debts. This information is calculated into a score, which lenders use to approve or deny you a loan.
There are two major credit reporting agencies in Canada -- Equifax Canada and Trans Union of Canada. Both these agencies get their info directly from the institutions where you have applied for a loan. Once Equifax and Trans Union get the information, they will update your file and make appropriate changes. For example, if you’ve moved or if you’ve changed jobs, that information gets updated.
Each month, these member agencies, which include banks, finance companies, auto leasing companies, credit card companies and retailers will send information about every consumer loan to Equifax and Trans Union. So if you’ve missed a payment one month, it will be reflected on your credit report. If the next payment is on time, it will cancel out the last report; however, the credit agencies will keep a notation of the arrears.
What You Need to Know About Your Credit Report
The major sections include: your personal identification, a consumer statement, credit information, public record information, third-party collections and inquires.
First and foremost, it’s important to make sure your identification information is accurate. Secondly, your credit information, which shows your payment history, should not exceed 30 per cent of all credit granted. For example: if you have credit cards, lines of credit etc. with available credit of $10,000, make sure you have only used $3,000.
Third-party collections need to be cleared up before applying for a mortgage. And finally, limit your enquiries by not applying for too much credit before applying for a mortgage. Too many enquiries lower your score.
There are two major credit reporting agencies in Canada -- Equifax Canada and Trans Union of Canada. Both these agencies get their info directly from the institutions where you have applied for a loan. Once Equifax and Trans Union get the information, they will update your file and make appropriate changes. For example, if you’ve moved or if you’ve changed jobs, that information gets updated.
Each month, these member agencies, which include banks, finance companies, auto leasing companies, credit card companies and retailers will send information about every consumer loan to Equifax and Trans Union. So if you’ve missed a payment one month, it will be reflected on your credit report. If the next payment is on time, it will cancel out the last report; however, the credit agencies will keep a notation of the arrears.
What You Need to Know About Your Credit Report
Your credit report and score are important tools for acquiring a loan of any kind including a mortgage. So it’s in your best interests to understand what your credit report is and what’s on there. It’s advisable to get a copy of your credit report at least once a year to make sure all the information is correct. Both agencies receive billions of data each month from banks, finance companies, credit unions, retailers – just about everyone who grants credit -- so it’s easy to see how mistakes could be made.
The major sections include: your personal identification, a consumer statement, credit information, public record information, third-party collections and inquires.
First and foremost, it’s important to make sure your identification information is accurate. Secondly, your credit information, which shows your payment history, should not exceed 30 per cent of all credit granted. For example: if you have credit cards, lines of credit etc. with available credit of $10,000, make sure you have only used $3,000.
Third-party collections need to be cleared up before applying for a mortgage. And finally, limit your enquiries by not applying for too much credit before applying for a mortgage. Too many enquiries lower your score.
To access your credit reports go to www.equifax.ca or www.transunion.ca. You can also purchase your report online as an instant download. If you need repairing your credit, your mortgage professional can help.