Your credit score can impact your ability to borrow, buy a home or car, and even to get a job. It reflects your level of financial responsibility and therefore you must diligently protect it. And, because of increased fraud and identity theft, it’s equally important you ensure your credit report is accurate.

 

If you’ve paid back your loans on time, maintained revolving credit (credit cards or lines of credit), and not declared bankruptcy, you’re probably in good shape. But, if you’ve done some credit damage, you’re going to have to repair your score.

 

Be wary of credit counselling agencies that are not endorsed by the government. Although they may claim to “fix” your credit by having bad things removed from your file (in exchange for payments), that’s impossible. Unless there is a reporting error on your credit file, your credit score can’t be manipulated. The only true way to repair a bad credit score is to prove you’re responsible with money and wait it out.

 

So, make your payments on time, don’t miss payments and make sure you do pay. It’s also important to note that if you’re a co-applicant on a credit card or loan, or if your name isn’t directly on a bill, you do not build credit. So, if you want to build a positive credit record, have your own credit card and loans, put bills in your name and pay your debts on time.


If you’re struggling with keeping up, see a credit counsellor. Check out creditcounsellingcanada.ca or creditcanada.com. They can help you negotiate new terms with your lenders. Bankruptcy and foreclosure hurts both you and the credit provider, so try to work with your creditors to arrive at a potential solution. They’ll be more willing to negotiate with you if you’re serious about paying up, and they’ll avoid writing off a bad loan.


There are two credit bureaus in Canada — Equifax and TransUnion. You can request a free copy of your credit score by visiting their websites. It’s important to know your credit score and do everything you can to protect it.


Tips



  • To ensure your credit file has accurate information, check on it every year.

  • Ensure the credit bureau’s records match your records. Look for identity theft, corporate reporting errors, loan defaults, and other negative items.

  • If you have a question or inquiry, send a written request (with official receipts and paperwork) to the credit bureau and they will investigate the matter for you.

  • If an error is discovered in your file, the credit bureau must correct it.

  • If you’ve applied for credit and your application is refused, the credit bureau isn’t responsible for the decision — the credit grantor makes the decision based on their lending policies.