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How to get your free annual credit report

After one of my recent Moneyville posts – How a 1% rule can help you save – I suggested that now would be a good time to order a free credit report from both Equifax and Transunion. From that post, I received quite a few e-mails from readers who were confused as to how to actually obtain their free credit report.

When you go onto these credit bureau websites, it isn’t clear how to obtain your free credit report. Instead, most links direct you to options where you can pay either a one-time or monthly recurring fee in order to access your information online immediately. That’s how they make money off of you. But if you’re okay waiting for your report to come through the mail, you will be able to access your free credit reports once every year.

Equifax (Canada)
You will need to fill out this PDF document, provide photocopies of 2 pieces of government-issued identification, as well as an additional document that shows your address – like a recent telephone or utility bill. You should receive your credit report in the mail in 5-10 days.

Transunion (Canada)
Download and complete their Consumer Request form. Note that Quebec residents have a different form to complete. You will need to photocopy two pieces of identification – and combined, they must include your name, current address, date of birth and signature.

USA
The three credit bureaus in the USA are Experian, Equifax, and TransUnion. According to the Fair Credit Reporting Act, consumers are eligible to get one free comprehensive disclosure of all the information in their credit file from all three credit bureaus once every 12 months through www.annualcreditreport.com.

Why you need to order your credit report

A credit report is a “snapshot” of your credit history. Lenders rely on credit reports and credit scores to help them determine your credit application approval. This affects all aspects of your life that require a judgement of your credit worthiness – such as a bank loan application, applying for a mortgage, buying a car, getting a credit card, and even when you try to rent an apartment.

Remember that a credit score and a credit report are two different things. Your credit score is a number between 300 and 900, and is constantly changing as new financial information is collected about you, and old or inaccurate information is deleted. Meanwhile, a credit report will allow you to see whether you’ve paid your bills on time, the credit limit for each of your creditors, how much you owe, and how many accounts you have open.

Be aware that you will not be able to obtain your credit score for free – you will almost always have to pay for that. Likewise, if you need immediate access to your credit reports online, you will have to pay for that privilege as well. For example, if you wanted your Equifax credit score (Canada) immediately, you would pay $15.50 for it.

Even those who are debt-free and make all their payments on time should still check their credit report and score at least once a year to monitor for inaccuracies. While you are allowed to correct mistakes and misinformation that you find in your report, the process is very slow and that lost time could cost you your dream house or might result in a personal loan being denied. Catching errors ahead of time will ensure that when you do need to apply for credit in the future, you can be confident about your credit history. Plus, ordering your credit report is free, so there’s really no excuse not to be checking every year.

I personally check my credit report and credit scores in October around my birthday. When do you check yours?

My current credit score

I’ve been bad and haven’t personally checked my credit score since February 2008, where it was 724. Before that, I checked in March 2007 and it was 727.

In April 2008, a mortgage broker checked my score and it was 776 – but that was an average of both TransUnion and Equifax.

Your credit score is a judgment about your financial health. It indicates the risk you represent for lenders, compared with other consumers. Because of my credit score, I was able to get my LASIK eye surgery, and my current car loan financed at 0%.

There are a lot of different ways to work out your credit score. In Canada, Equifax and TransUnion use a scale from 300-900. The higher your score, the lower the risk for the lender.

You can request your credit report for free once per year, but it costs money to see your credit score. With Equifax, it’s $23.95 and TransUnion costs $22.90 ($14.95 for your credit profile, and $7.95 for your credit score).

So today I checked my Equifax score, and it was a solid 755. I was actually expecting worse because of the car loan I took out, but I’m very pleased. Hopefully I can raise it to closer to 800 by the time we are ready to buy our first place. And next year when I check my credit score again, I’ll use TransUnion just so I’m up-to-date on where I stand with both credit bureaus.

When was the last time you checked your credit score?

Almost time to check my credit score!

It’s been almost a year since I last checked my credit score, so I thought I should probably check it again pretty soon. Back then, my score was 776. Which is pretty good. But I’d like to know what it is now. Since last year, I’ve gotten 1 new credit card and I’ve also taken out a $3,000 loan for my LASIK eye surgery.

In Canada, scores range from 300-900, with most Canadians ranking in around the 700s.

Back in the day, I used to not care about my credit score – why would I? But now, I’m taking every precaution to make sure I have a fabulous credit score. Because really, the credit score is the key to pretty much everything grown-up. Like getting a fantastic interest rate on your mortgage, or getting approved for no-interest loans (like the one I got for my LASIK surgery – if I hadn’t gotten 0% interest, I wouldn’t have done it). Without a great credit score, you could either not get approved for the loans that you want, or if you do, you’ll only get what you want with a ridiculous interest rate and dumb restrictions.

So it’s really important to 1) know what your credit score is, and 2) take all the precautionary steps to make sure you are doing all that you can to maintain and/or increase your score.

Here are some tips that CBC Marketplace has for improving your credit score:

  • Establish a credit history.
  • Maintain low-to-moderate balances, and be sure to make all of your payments on time!
  • Don’t apply for credit unless you really need it. (I’m guilty of this one – I didn’t need the Amex card, or that LASIK loan)
  • Check your credit report every year and report any errors. (I found an error last year on my report but didn’t get around to reporting it. If it’s still on there, which I’m assuming that it is, I will do it this time around)

I’m assuming there still isn’t anywhere for Canadians to check their credit score for free?

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