How and why you should check your credit report

Credit counsellors say a recent federal court case involving unauthorized snooping should serve as a wake-up call for everyone to check their credit record.
Because we love to borrow money, that means almost every adult Canadian has a credit file. More than 21 million of us have credit reports. And most of us have no idea what's in them. (iStock) (iStock)

Credit counsellors say a recent federal court case involving unauthorized snooping should serve as a wake-up call for everyone to check their credit record.

A man from Beechville, N.S., successfully sued Bell for checking his credit record without his permission.

Bell was ordered to pay $10,000 to Rabi Chitrakar for breaching his privacy and another $10,000 for damages for giving him the "royal runaround.”

Lawyer Mike Dull said it appears Chitrakar's case has set a precedent.

“It  serves as a warning sign to Bell and to companies that operate in a similar fashion: namely, do not sacrifice people’s privacy interest for the sake of commercial gain,” he said.

Mortgage broker Audrey Wamboldt said unauthorized prying happens all the time.

"Once in every five or six clients I'll actually see credit inquiries on people’s credit bureaus that have been unauthorized."

Credit rating affected

According to credit counsellor Linda Wilke many people know credit reports exist, but don't realize they can or should review them

“It can differentiate between you getting a mortgage, between what rate you'll pay on a mortgage, what rate you'll pay on a loan, whether you'll get a loan. In some cases whether you're be able to get a cell phone contract, whether you can rent an apartment,” she said.

That’s something Brian Downey knows all too well.

How can a low credit hurt me?

Any company that's thinking of granting you credit or providing you with a service that involves you receiving something before you pay for it (like phone service or a rental apartment) can get a copy of your credit report

1. Applying for a loan.

2. Applying for a job.

3. Renting a vehicle.

4. Renting a house

Last year he wanted a loan to buy a  bigger home for his growing family. The contractor thought he had good credit,  yet the mortgage deal almost went down the drain.

Soon he was at the bank's mercy.

"I was vulnerable,” he said.

He discovered one of the banks had pulled his record four times, but he had only given them permission to look at it once.

Those multiple inquiries deducted points from his credit score. His rating became so low, he was considered a mortgage risk.   

“It was terrifying. I was scared because we had a deal in place to sell our other house. Essentially we may have been homeless,” he said.

How do you get your record?

Everyone who's ever borrowed money to buy a car or a house or applied for a credit card or any other personal loan has a credit file. Checking a report  ensures it's accurate and that people aren’t the victim of identity theft. Credit counselling services say everyone should check their credit report every year.

Credit reports show the credit you have and whether you make payments on time. They're collected by two businesses: Equifax and TransUnion Canada. You should check with both bureaus.

Complete details on how to order credit reports are available online. Basically, you have to send in photocopies of two pieces of identification, along with some background information.

Both provide free credit reports, but simply clicking on a request to get a file or report doesn't mean users will receive a free one. The "free-report-by-mail" links are not prominently displayed — the credit bureaus are anxious to sell you instant access to your report and credit score online.

People can complete mail in a request or pay between $15 and $25 and get it online immediately.

If you find something if your file that you dispute, you can write the credit agency in question and tell them you think there's an error. The credit reporting agency usually sends along the form you need when it sends you the credit report. Use it to spell out the details of any information you dispute. The dispute forms are online, too.


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