Your bank, car dealer, future landlord: all these are people and businesses can ask you for permission to see your credit report. Why? To see whether you pay your bills on time.
Content of a Credit Reports and How Long They Last
A “credit report” is a document with information about your financial situation. It identifies you, says what money you owe and says whether you pay your debts.
A credit report contains this information:
- personal information: name, current address, former addresses, date of birth, social insurance number, etc.
- credit information: credit cards, lines of credit, loans and mortgages, debts you’ve been unable to pay, etc.
- banking information: bank accounts, cheques returned for lack of funds, etc.
- public information : bankruptcies, court decisions, lawsuits taken against you, etc.
- additional information: for example, a note that you were the victim of identity theft or any other information that could help in understanding your report
- information about people or institutions who looked at the report
Legally, there is no minimum or maximum amount of time this information is kept in a credit report. However, there are certain common practices. A credit bureau normally keeps information about your credit for six years as of the time the last time information is entered into the report.
However, certain information can be kept longer. For example, an indication of a second bankruptcy can stay in your report for up to 14 years.
Creation and Use of Credit Reports
In Canada, the main credit bureaus are Equifax and TransUnion. These companies look after collecting, updating and making available to their customers information about the state of your personal finances. Customers of credit bureaus pay a fee to access the reports of people to whom they are considering giving credit.
These customers include the following:
- caisses populaires
- finance companies
- leasing companies
- credit card companies
- providers of services
- retailers (merchants)
Businesses and banking institutions give information to credit bureaus. However, they must get your authorization before doing this. This authorization often forms part of the contract you signed with them.
For example, your credit card company might inform the credit bureau about the frequency of your payments and delays in your payments. A merchant who sold you your home entertainment system on credit might also notify the credit bureau that you did not make your last payment.
Authorization Not Required in Some Situations
Organizations that have personal information about you, such as financial information, can send it to certain people without your permission. For example, they can send it to a debt collection agency, their lawyers, a tribunal or the police.
Who Has Access to Your Credit Report
You have to apply for access in writing to the credit bureau with which you want to do business. The credit bureau must answer your request within 30 days.
The credit bureau has the right to a “reasonable charge” to make a copy of and to send the information. It must tell you the amount in advance.
However, you have the right to read online, free of charge, any personal information contained in your credit report.
Usually, a person or business who wants to look at your credit report (often called a “doing a credit check”) must get your permission.
For example, every time you fill out a loan application at a bank, you are asked to give permission. Also, if you want to rent an apartment, the landlord might ask for permission to look at your credit report. This might mean that you have to provide certain information that will identify you.
You are not required to allow someone to look at your credit report. Of course, if you refuse, the institution or business that made the request may decide not to do business with you.
If you are refused products or services because you felt it was unnecessary to give access to your credit report, given the nature of the product or service in question, you can file a complaint with the Commission d’accès à l’information.
Asking for your credit score
A credit score is a number between 300 and 900. It is determined by applying a mathematical formula to the information in your credit report.
You can ask a credit bureau to provide your score as well as information to help you understand it. You can ask that this be provided by internet, if you wish. This service is free of charge.
Protecting your credit report
The law provides certain measures to protect your credit report. These are the security alert, the explanatory statement, and the credit lock (also known as the security freeze). These measures have no impact on your credit score.
If the credit bureau refuses your request for such measures, you can file an “application for the examination of a disagreement” with the Commission d’accès à l’information (CAI).
If the credit bureau does not respond to your request for such measures, you can contact the Autorité des marchés financiers (financial markets authority) to file a complaint.
The Security Alert
If you believe you have been the victim of identity theft, or of a data leak, it may be wise to ask the credit bureau to activate a security alert in your credit report. This is free of charge.
During the time this alert is in effect, the credit bureau must inform any third party (for example, a bank) that wishes to consult your credit report that it must do an extra verification of your identity. You must provide a phone number in order to reach you.
However, the bureau does not have to apply this measure in situation where your authorization is not required to transmit your information to someone (see Authorization not Required in Some Situations in box, above).
You can have the security alert removed at any time. You simply have to ask the credit bureau to do so.
The Explanatory Statement
You may find out that your credit report includes something you disagree with. In this situation, you can ask the credit bureau to add an explanatory statement to your report. This allows you to present your version of the facts. The statement could be about a disagreement concerning the correction of information in your report or about access to your report. There’s no charge to have an such a statement added to your report.
The explanatory note must:
- Describe the disagreement
- Present your version of the facts, without defaming anyone (that is, making false statements about them)
When the credit bureau transmits personal information contained in your credit report to third parties (for example, a bank) it must include this explanatory note, so that the recipient will be informed of the disagreement.
The explanatory note will remain in your credit report as long as you do not request its removal. It can, however, be removed in the following situations:
- an agreement is reached
- the Commission d’accès à l’information refuses or ceases to examine the disagreement
- a final decision puts an end to the disagreement
The Credit Lock
If you believe you were the victim of identity theft or of a data leak, it may be wise to ask the credit bureau to activate a lock on your credit report. At the current time, this measure is free of charge.
While the credit lock is in effect, certain requests for access to your credit report will be blocked. These will prevent obtaining:
- credit (for example a new credit card)
- an increase in a credit limit
- long-term leases (such as for a car)
- long-term remote services (such as a cellphone)
While the credit lock is in effect, the credit bureau must inform anyone who wishes to consult your credit report (for example, a bank) that the credit lock is in effect.
It is still possible to consult your credit report for other types of applications. For example, if you are looking for an apartment, a landlord could have access to your report, despite the credit lock being in effect.
The credit lock can be lifted or suspended whenever you wish. You just have to make a request to the credit bureau. This could be useful, for example, if you wish to obtain a new credit card or a cellphone plan from a new service provider.
Correction of Information in a Credit Report
You have the right to ask that wrong or out-of-date information in your credit report be corrected or removed. This could be, for example, because you think that reference to a court decision that ordered you to pay money is no longer relevant because you’ve paid it in full, and you have proof of this. A request for a correction must be made in writing.
- First, contact the credit bureau to find out the procedure for asking for a correction.
- The credit bureau can ask you to fill out its own correction request form and return it by mail. You can attach a copy of any relevant document. Using the company’s own form ensures that you don’t forget any information it considers necessary to process your request.
- If you send your form by registered mail, you’ll have proof of the date the credit bureau received your request.
The credit bureau has 30 days from the date it receives the request to respond. It will often check with the company that provided the information to see whether an error was made.
If the company says that the information in your report is correct, but you do not agree, you can submit a short explanation to the credit bureau, and the credit bureau will include it in your credit report.
Your Request Is Ignored or Refused: Solutions
If you do not get a response within 30 days or if the company refuses to make the corrections, you can file an “application for the examination of a disagreement” with the Commission d’accès à l’information (CAI).
You must file this application within 30 days of the refusal of your correction request by the credit bureau or the expiry of the time it had to respond to it. The Commission d’accès à l’information will determine whether your correction request is justified and order any necessary corrections.