Excerpts from: How to Check Your Credit Report (and Credit Score), Nov 16, 2012

Almost every adult Canadian has a credit file. Any company that’s thinking of granting you credit or providing you with a service that involves you receiving something before you pay for it (like phone service or a rental apartment) can get a copy of your credit report.

And most of us have no idea what’s in them.

You may be surprised by the amount of personal financial data in your credit report. It contains information about loans & credit accounts — whether you regularly pay on time, how much you owe, what your credit limit is on each account and which companies have accessed your file.

A credit rating or score (also called a Beacon or a FICO score) is not part of a regular credit report. Basically, it’s a mathematical formula that translates the data in the credit report into a three-digit number that lenders use to make credit decisions.

The numbers go from 300 to 900. The higher the number, the better. For example, statistics show that only two per cent of the borrowers with scores between 750 and 799 will default on a loan or go bankrupt in the next two years. Anyone with this score is very likely to get that loan or mortgage they’ve applied for. Someone with a credit score below 650 may have trouble   receiving new credit. Some mortgage lenders will want to see a minimum score of 680 to get the best interest rate.

For a small fee, you can get your credit score online. If you don’t want to pay, you can ask for a free copy of your credit file by mail. There are two national credit bureaus in Canada: Equifax Canada and TransUnion Canada. The “free-report-by-mail” links are not prominently displayed — the credit bureaus are anxious to sell you instant access to your report and credit score online — but complete details on how to order credit reports are available online. The reports will come back in two to three weeks.

If you find something in your file that you dispute, you can write the credit agency in question and tell them you think there’s an error. The credit reporting agency usually sends along the form you need when it sends you the credit report. If the file is changed, you will be sent a copy of your new report and any company that’s requested your credit file in the previous two months will also be sent the corrected file.