Do you know your credit facts?
Understanding more about credit reports and scores can help you start living a better financial future. But there are a lot of misconceptions about credit reports and scores.
We surveyed 1,006 Canadians between October 6 to 17, 2022, and found six credit facts that most Canadians get wrong.
Keep reading to learn more about these important credit basics.
Fact 1: Credit reports don’t contain credit scores
We learned that only 15 per cent of Canadians know that credit reports don’t contain credit scores. A credit report is a summary of your credit history. Your Equifax credit report contains four types of information:
Personal information (such as your name and date of birth)
Credit accounts (such as credit cards, mortgages or car loans)
Inquiry information (information about who has pulled a copy of your credit report)
Public record and collections information (such as bankruptcies or past-due accounts that have been turned over to collections agencies)
Fact 2: You have more than one credit score
If you thought you only had one credit score, you’re not alone. Our survey found that only 32 per cent of Canadians know that there are many different credit scores used by lenders, including credit scores provided by the two major credit reporting agencies in Canada — Equifax and TransUnion.
Fact 3: Credit bureaus don’t decide whether or not you qualify for a loan
Only 33 per cent of respondents got this right. Credit bureaus, also called credit reporting agencies or credit assessment agents, collect and compile information about your credit history from banks, creditors and various other sources. Credit bureaus compile this information in the form of a credit report and provide it to banks and other lenders as one of the ways to help assess your creditworthiness. The decision to deny or approve someone for a credit request ultimately lies with the lender or creditor.
Fact 4: A good credit score doesn’t always mean you’ll get approved for a loan
While your credit score is important, 37 per cent of Canadians know it’s only one factor lenders may consider when deciding whether or not to approve your loan application. Each lender and creditor may have its own criteria for denying or approving credit requests.
Fact 5: Credit reports don’t contain registered retirement savings plan (RRSP) balances
As mentioned above, credit reports contain personal information, credit account information, inquiry information, and public record and collections information. They don’t contain information on RRSPs or registered education savings plans (RESPs).
Fact 6: Employers can check your credit information when conducting background checks
Before you start applying for a new job, you should review your credit reports and scores. Why? Many employers check applicants’ credit scores and reports during their background checks. A low score, or inaccurate information on your credit report, could hurt your chances of landing your dream job.