How to Read Your Credit Report

You should know what’s on your credit report. Check it at least twice a year.

Your credit history is recorded in your credit report maintained by Canada's three major credit-reporting agencies: Equifax Canada, TransUnion Canada and Northern Credit Bureaus Inc. A credit report is a "snapshot" of your credit history and is the primary tool lenders use to decide whether or not to give you credit.

Your credit score is a judgment about your financial health. It indicates the risk you represent for lenders, and your profit potential, compared with other consumers. The higher your score, the lower the risk for the lender and/or the more profitable you will likely be as a customer.

Some credit-reporting agencies report the lenders' rating of each of your credit history items on a scale of 1 to 9. A rating of "1" means you pay your bills within 30 days of the due date. A rating of "9" means that you never pay your bills at all or that you have made a consumer debt repayment proposal to the lender. A letter will also appear in front of the number: for example, I2, O2, R2. The letter stands for the type of the credit you are using.

"I" refers to an installment loan, such as for a car loan, where you borrow money once and repay it in fixed amounts, on a regular basis, for a specific period of time until the loan is paid off.

"O" refers to open credit such as a line of credit, where you borrow money, as needed, up to a certain limit and the total balance is due at the end of each period. Student loans can also fall into this category because the money may not be owing until you are out of school.

"R" refers to revolving credit, on which you make regular payments in varying amounts depending on the balance of your account, and can then borrow more money up to your credit limit. Credit cards are revolving credit.

The most common ratings are "R" ratings. These are known as North American Standard Account Ratings and are the most frequently used. The "R" indicates that the item being described involves revolving credit. If you always pay on time, it will be coded an R1. If an amount was written off because you never paid it back, it is coded R9. The R ratings are a coding system that translates "on time", "one month late", "two months late", etc., into two-digit codes.

R00--Too new to rate; approved but not used;
R1--Pays (or paid) within 30 days of payment due date or not over one payment past due
R2--Pays (or paid) in more than 30 days from payment due date, but not more than 60 days, or not more than two payments past due
R3--Pays (or paid) in more than 60 days from payment due date, but not more than 90 days, or not more than three payments past due
R4--Pays (or paid) in more than 90 days from payment due date, but not more than 120 days, or four payments past due
R5--Account is at least 120 days overdue, but is not yet rated "9"
R6--This rating does not exist.
R7--Making regular payments through a special arrangement to settle your debts (i.e., credit counseling)
R8--Repossession (voluntary or involuntary return of merchandise)
R9--Bad debt; placed for collection; moved without giving a new address or bankruptcy.

Canada's three major credit-reporting agencies are:

Equifax Canada
Tel.: 1-800-465-7166 or Fax: (514) 355-8502

TransUnion Canada
Tel.: (905) 525-0262 or Toll-free: 1-866-525-0262 (except in Quebec)
Tel.: (514) 335-0374 or Toll-free: 1-877-713-3393 (Quebec residents)

Northern Credit Bureaus Inc.
Fax (toll-free): 1-800-646-5876

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