Revisiting the Credit Report
My last newsletter covered how a credit score is calculated, and the effect on your credit report of not using credit you have or using a large percentage of your available credit.
It is also vital to understand your full credit report, which is a summary of your financial history, containing information such as mortgages you may have, student loans, and credit cards that may be in your name. This report is used by lenders to make certain lending decisions about you.
Canada has two credit agencies which gather this information on you, Trans Union and Equifax. I recommend contacting them to check your report once a year for accuracy and especially as a precaution to protect your identity. This is a free service and well worth the time, considering the financial and emotional impact of having your identity stolen.
Look for accounts that don’t belong to you on the report. Accounts that you don’t recognize could mean that someone has applied for a credit card, line of credit, mortgage or other loan under your name. While it could be just an administrative error, question any such item with the credit bureau to make sure it is not fraud or identity theft. There are many horror stories out there on people whose identities have been stolen.
Check also the credit reports of any of your children. Sometimes criminals assume the identity of a minor knowing that this person is unlikely to be aware of the theft for many years.
ACCURACY ON YOUR CREDIT REPORT
Errors on your credit report can give lenders the wrong impression. If there’s an error, a lender may turn you down for credit cards or loans, or charge you a higher interest rate. You may also not be able to rent a house or apartment or even get a job if a credit check is part of the hiring process. Such errors may include:
- mistakes in your personal information, such as a wrong mailing address or incorrect date of birth
- errors in credit card and loans, such as a payment you made on time that is shown as late
- negative information about your accounts that is still listed after the maximum number of years it’s allowed to stay on your report*
- accounts and credit cards listed which you never opened, a possible sign of identity theft
*Negative information such as late payments or defaults only stays on your credit report for a certain period of time. In general, negative information more than seven years old from the date of last activity (ten years for bankruptcies) must be removed from your file. (Positive information usually remains on your report for ten years.)
WHAT TO DO IN CASE OF ERRORS
If you find an error, report it to the lender and the credit bureau to have it corrected. Lenders should be asked to close any loans or accounts which you did not open yourself. However, if you suspect fraud on your credit report, it is vital to contact any other organizations that could be affected. Tell them about the potential fraud.
If it’s proven to be fraud, you should:
- contact Equifax Canada and TransUnion Canada to inform them about the fraud
- ask to put a fraud alert on your credit report
- report it to local police for investigation and to the Canadian Anti-fraud Centre which is the central agency in Canada that collects information and criminal intelligence on all forms of mass marketing fraud, identity theft complaints and others.
Some interesting facts about Identity Theft and its cost to victims:
Savvy Cybersecurity Seminar: I am passionate about educating people on how to protect themselves online to safeguard their identity and that of their family members. The 10 principles of Cybersecurity include these three and more:
- Understand how your brain may trick you into not reviewing all emails before opening them or clicking on the links they contain;
- Change week passwords to strong ones and implement two-factor authentication;
- Securing your email and home wi-fi network
Contact me if you belong to a group or organization that would like more information on a free 30- to 60-minute presentation on cyber-security. Share this newsletter with any contacts who are part of such groups. Your referrals are always welcome.