Review your credit reports annually, for free

31 July 2014Finance

If you’ve ever applied for a mortgage, a car loan, or a postpaid mobile phone plan, you’ve probably been the subject of a credit check. In such cases, the business from which you’re seeking credit retrieves your credit score – a number representing your expected creditworthiness – from a credit reporting agency. In Canada, the two major credit reporting agencies are Equifax Canada and TransUnion Canada. They each maintain large databases of information about your credit history – any credit cards or loans you have and how diligently you’ve repaid them over time.

Your credit score is derived from the financial data stored in your credit file, so it’s important that this information is accurate. An incorrect entry could lower your credit score, negatively affecting your ability to get a loan or rent an apartment. The credit reporting agencies collect information on billions of transactions for millions of individuals so errors do occur. For example, you might share a name with someone that has bad credit and experience the misfortune of having one or more of their transactions hit your credit file by accident. Worse, you could be the victim of fraud, with someone using your identity to take out bad loans.

The credit reporting agencies will gladly sell you access to your credit report and credit score so that you can make sure the information on file is accurate. For about $15/month they’ll even provide credit monitoring services that are marketed at helping you protect your credit score from errors and fraud. But if paying almost $200 a year for access to a database of your own personal financial data seems excessive, there is an alternative – and it’s free.

By law, you have the right to access the information the credit reporting agencies store about you. As a result, once a year you can request your “credit file disclosure” from Equifax Canada and your “consumer disclosure” from TransUnion Canada for free. The process for obtaining these disclosures isn’t quite as easy as ordering a paid credit report – there’s an incentive for the credit reporting agencies to make it harder to get the free report. It’s also worth noting that a free credit disclosure excludes your credit score, so if you are curious about how you stack up you’ll have to pay for that. You can request your free credit disclosures by mail, fax, or by using an automated telephone system. Using the telephone is by far the easiest method, and once requested you should receive your credit disclosure within 5-10 business days.

To request your free credit file disclosure from Equifax Canada by telephone, call 1-800-465-7166.

To request your free consumer disclosure from TransUnion Canada by telephone, call 1-800-663-9980.1

I personally have a recurring reminder to request my credit disclosures each spring. When I receive my reports, I check to make sure there aren’t any strange loans or credit cards listed, that all of my loan payment information is accurate, and that there haven’t been any suspicious businesses requesting information about my credit history. The entire process takes about 30 minutes of my time each year, which is well-worth the piece of mind it provides.

The Government of Canada has additional information on ordering your credit report and what steps you should take if you find any errors.

  1. Unfortunately, TransUnion seems to have changed the process for accessing their automated telephone system, so you need to call them during regular business hours and request a transfer to the “automated telephone system for requesting a consumer disclosure” once you speak with a live customer service representative. This is another example of the credit reporting agencies making it a little more difficult to get something for free.