TIPS TO TEND TO YOUR CREDIT
Farhaneh Haque, Regional Director – TD Canada Trust
For each article, I look for inspiration in what’s going on in the mortgage or real estate industry, to share some insights for the readers. This month, I wasn’t so much inspired rather distressed about something that happened, and so here I am writing about it! Last week, I opened up my cell phone bill and was surprised to see that my balance was 3 times my normal monthly bill. At first, I thought perhaps I had forgot to pay last month’s bill – very unlike me – but about 2.5 hours and 5 different customer service representatives later, I was informed that someone had used my “excellent account repayment history” to obtain a free hardware upgrade to a smart phone and renewed me into a 3 year contract! Well as the fraud analyst reversed everything and reset my account, he said to me “Farhaneh, I recommend that you contact Equifax to confirm that your good credit record hasn’t been used to obtain fraudulent credit elsewhere.” Sound Advice, I thought myself and an appropriate topic for my next issue. A survey conducted by the Financial Consumer Agency of Canada (FCAC) found that most people (90%) don't know that you can get your own credit bureau report for free simply by requesting it by mail.¹ Sixty-two percent do not know that you can dispute an entry in your credit report, even though it's as easy as writing a letter to the bureau. Who compiles your credit history? In Canada, credit information is collected by two major credit-reporting agencies, Equifax Canada and TransUnion Canada. They record how you have used credit and whether you pay your loans and bills on time, as reported by your lenders. They may share that information with others only in certain circumstances, one of which is when you have provided your consent, such as when you apply for a loan. Finding out what's in your report is easy. You can pay a small fee to request a copy of your credit record online – I paid $15 - or obtain it for free if you send a request by mail or fax. It's a good idea to check your record once a year to ensure that it's accurate. What's in your report? Your credit report contains relevant details about your personal and financial situation, such as: Your basic personal information, including your Social Insurance Number
Any credit you have, such as credit cards, loans or a mortgage Public records such as a bankruptcy or court judgment in a lawsuit
Whether a debt was ever referred to a collection agency for payment as reported by a lender Any inquiries about your credit report made by you, a lender or any other authorized organization Mistakes can happen and you have the right to dispute any inaccurate information that may appear on your credit report. You can find detailed guidance on how to correct an error through the FAQs and resources available on the Financial Consumer Agency of Canada website. Why it's important The information in your credit history is the basis of your credit score, a measure that reflects your current financial situation and your ability to repay a loan. Lenders take this score into account when you apply for a loan, mortgage or credit. How to maintain a passing grade To maintain a good credit rating, or improve one that's not as good, the following dos and don'ts may help. Do: Pay your bills on time Lower your debt ratio — the amount you owe relative to the amount you earn Keep your credit balances well below their authorized limits Close or cancel any credit accounts you don't really need Don't: Constantly max out your credit card limit Be late with payments Have your account sent to a collection agency Ignore any debt issues
TIP: The Financial Consumer Agency of Canada (FCAC) recommends that you not accept or use any form of credit before being comfortable with its terms and conditions, to avoid potential misunderstandings between you and the credit issuer that may end up in negative consequences. Where to get help To obtain your personal credit rating, contact Equifax or TransUnion. For more guidance, read the FCAC publication Understanding Your Credit Report and Credit Score.
Kevin Benta is a Century 21 Percy Fulton Sales Representative and serves Toronto, Pickering, Ajax, Whitby and Oshawa.