Understanding Your Credit Report

Your credit rating is a collection of information such as your employment history, details on your bank accounts, outstanding debts, loan payments, and whether or not you have declared bankruptcy or filed a consumer proposal and been discharged.

Credit reporting agencies or credit bureaus collect information about a consumer’s financial affairs and sell that information to their business members, such as credit grantors, employers and insurance companies. Credit bureaus obtain their information from consumers when they fill out application forms for credit, from public records such as bankruptcy filings at Industry Canada, Court judgments, foreclosures, etc. Credit grantors and collection agencies send their credit files electronically to the credit bureau every month, resulting in files that include account numbers, outstanding balances, and a nine-point credit rating scale.

The nine-point credit rating scale is as follows:

0 Too new to rate; approved but not used;
1 Pays (or paid) within 30 days of billing, pays account as agreed;
2 Pays (or paid) in more than 30 days, but not more than 60 days, or one payment past due;
3 Pays (or paid) in more than 60 days, but not more than 90 days, or two payments past due;
4 Pays (or paid) in more than 90 days, but not more than 120 days, or three or more payments past due;
5 Account is at least 120 days overdue, but is not yet rated 9;
6 (Code 6 does not exist);
7 Making regular payments under a consolidation order or similar agreement;
8 Repossession (indicate if it is a voluntary return of merchandise by the consumer);
9 Bad debt; placed for collection; skip; bankrupt.

As such, it is important for you to determine that your credit rating is accurate and complete and there are procedures for you to take if you determine that your credit report is not accurate.

The principal credit bureau for British Columbia is Equifax Canada Inc., P.O. Box 190, Station Jean Talon, Montreal, Quebec, H1S 2Z2, toll free phone # 1-800-465-7166 and fax # 1-514-355-8502.

For more information please visit www.fcac.gc.ca or contact a Vancouver Insolvency Trustee for a free initial consultation.