The Basics

Each individual creditor that generates their own rating for you. Your creditor may be student loans, credit card companies, phone companies, and so on.

The rating below directly affects your credit score. Here’s how it works:

• 0 – Too new to rate; approved but not used
• 1 – Pays within 30 days of billing
• 2 – Pays between 30 and 60 days
• 3 – Pays between 60 and 90 days
• 4 – Pays between 90 and 120 days
• 5 – Pays after 120 days
• 6 – Rating does not exist
• 7 – Making regular payments through a special arrange to settle debts
• 8 – Repossession
• 9 – Placed for collections, moved without giving a new address or bankruptcy

Your credit score essentially assesses your risk. The score is determined by a combination of factors, such as your credit rating, age, number of years on file and your previous credit history. Your score can range from 300 to 900 with 680 being the recommended score. The higher the score, the lower the risk for the lender; this translates into easier access to credit, lower interest rates, and in some cases, an ability to negotiate exceptional terms and incentives.

Building Your Score

The goal is to have a very high score. There isn’t much you need to do other than make the minimum payments every month or even better, pay off your entire balance! The more creditors you have, the faster your score builds. It’s recommended to have a maximum of two credit cards, even if you don’t plan on using them often. You only need to use your credit card once every six months to keep it active. As long as you pay off the minimum or the entire balance every month, the companies will report your good habits.

You may be in a situation where your score has been damaged severely. If that’s the case, there are definitely some alternatives for you.

1. Secured Credit Card: You will need to deposit money (between $500 and $1000) to serve as collateral. After you make regular payments on your purchases, the company will refund you the initial deposit and will revert you back to an unsecured card.
2. Retail Credit Card: If you’ve been turned down by Visa or MasterCard, consider applying for a retail credit card. Major retailers tend to be a bit more lenient but have higher interest rates. As long as you pay off your balance in full, it will not be an issue. After using a retail card responsibly for a period of time (a year or more) re-apply for a major credit card.
3. Piggyback: A friend or relative can place you on their card as a secondary user. This method requires both parties to trust each other. As the secondary user, you don’t need to use your card to benefit from the primary user’s good credit.

You can obtain your credit report for free by ordering via mail, fax, phone or in-person; you can receive it in the mail or in-person. To access your report online, you will be asked to pay a fee.

Your credit score is not included in the free credit report. For an additional fee you can get your credit score within your credit report.

OBTAINING YOUR CREDIT REPORT BY MAIL OR FAX:

Equifax: You can  download the Credit Request form on Equifax’s website to obtain a credit report. You will be asked to provide two copies of acceptable identification, outlined in the link above. You have the option of providing credit card information on the form to purchase your credit score.

TransUnion: You can download the consumer disclosure form on TransUnion’s website to obtain a credit report. Provide two copies of acceptable identification. See the list here.

OBTAINING YOUR CREDIT REPORT BY PHONE:

Equifax: Call the agency at 1-800-465-7166 and follow the automated prompts.

TransUnion: Call the agency at 1-800-663-9980 and follow the automated prompts.

• For both credit bureaus, you will be asked a series of questions to confirm your identity. You will need to provide your Social Insurance Number (SIN) and/or a credit card number
• You have the option of paying an additional fee for your credit score, which is not included in the FREE credit report.

OBTAINING YOUR CREDIT REPORT IN-PERSON

Equifax: The head office is in Montreal, Quebec. This option is not plausible for most students; consider other options of obtaining a credit report.

TransUnion:

TransUnion
Consumer Relations
3115 Harvester Road, Suite 201
Burlington, ON L7N 3N8
Open Monday to Friday, 9:00 a.m. – 4:30 p.m.

Provide two copies of acceptable identification. See the list here.

• You have the option of paying an additional fee for your credit score, which is not included in the FREE credit report.

OBTAINING YOUR CREDIT REPORT ONLINE

Keep in mind, there is a fee for obtaining your credit report and credit score online. You will need credit card information to obtain your report and/or score.

Equifax: Visit the homepage here. At the bottom left hand side of the page, click “Get Started” to begin filling out your information to obtain a Credit Report/Score.
TransUnion: Visit the homepage here. Click on “Click Here” (orange button) to obtain your Credit Score/Report. There is a monthly subscription cost for this service that you can cancel at any time. Please read the details on the website prior to paying online.

How do I know when to report mistakes on my credit report?

If you do not recognize information on your credit report (an account you have never opened), or you believe an item may be inaccurate (i.e. your report states you paid 2 months late, when you believe you paid on time) , you have the right to request an investigation. It is helpful to obtain credit reports from both Equifax and TransUnion to compare and see if differences are substantial; this may indicate a mistake in reporting.

How do I report mistakes on my credit report?

Equifax: Details are outlined on their website. You will complete and submit a “Consumer Credit Report Update Form” by mail or fax with the information you wish to be investigated.
TransUnion: Please visit their website. You will be able to file a dispute over the phone or through mail. Click on your preferred method at the bottom of the page from the link above. To file through mail, you will be required to fill out the “Investigation Request Form.”

Additional documents will need to be photocopied and sent with the form. They are outlined in the links above.

What happens after I report a mistake on my credit report?

Before the credit bureaus (Equifax and TransUnion) can make any changes, they first need to check your claim with the lender that reported the information you are challenging as incorrect.

If the lender agrees there is an error, the bureaus will update your file. If the lender confirms the information is correct, no changes will be made. You will be notified of any changes.