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Thursday, May 25th, 2017

Why it’s crucial to check your credit report

By Ellen Roseman

Here’s a story that shows the importance of checking your credit report.
I recently heard from Delores, who was trying to renew her condo mortgage. But the bank wouldn’t sign a deal unless her credit history was cleaned up.
She found that Rogers Communications had reported a bad debt. She didn’t even have an account with Rogers – nor did she receive any collection notices.
It seems Delores had been mixed up with someone who had a similar name. She managed to get the bad debt removed just three days before her mortgage came up for renewal.
You don’t want to hear bad news while in the midst of negotiating a time-sensitive loan. So, you should know what secrets might be lurking in your credit files.
Under provincial laws, you have the right to check the credit reports in your name held by Canada’s two credit reporting agencies, Equifax and TransUnion. You don’t have to pay a fee and you can do it as often as you like, as long as you ask for the report to be delivered in the mail.
What stands in the way of exercising your legal right to check your credit report for free? I point to the fact that Equifax and TransUnion are private businesses, which want to sell as many products as they can.
When you visit their websites, you see promotions for online access to your credit report at $15 and subscriptions to credit monitoring services at $15 a month. But you can’t find the information about how to get your free credit report unless you dig very deeply.
In the United States, the law guarantees free access to your credit report at your request once every 12 months. To make things easier, the three U.S. credit reporting agencies have a central website, toll-free phone number and mailing address through which reports can be obtained.
Here’s another difference. In Canada, you have to pay to get access to your credit score. This newer piece of information, not mentioned in the laws governing credit reports, is used heavily by lenders to decide whether you get credit and at what rate. The score is based partially on your credit report, but incorporates other factors.
In the United States, consumers are entitled to receive a free credit score if they’re denied a loan or insurance because of their credit rating. They’re lucky to get this right, which came about as part of the Wall Street Reform Bill passed last July.
Canadians are still struggling to get free credit reports and correct them. Free access to credit scores isn’t on the agenda yet. I’d like to see tighter controls on credit bureaus and a greater role for government in ensuring access to this important information.
Ellen Roseman is a business writer at the Toronto Star.

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