The Credit Rating

Your credit rating is a score assigned to you based on many factors. Maintaining or rebuilding a good credit score is not rocket science but it is a process without shortcuts.

In Canada, there are two credit bureaus: EQCredit and TransCredit. These two companies collect information from your creditors to calculate your credit score, a score ranging from 300 to 900 points. So, before you make a new loan (or for all sorts of other reasons), your creditors will check your credit file to check your ability to get new credit.

What do the different codes say in my credit report?

  • Too new to rate; approved but not used.
  • Pay (or paid) within 30 days of the due date or no more than one late payment.
  • Pays (or paid) more than 30 days from the due date; but not more than 60 days or two late payments.
  • Pays (or paid) more than 60 days from the due date; but not more than 90 days late.
  • Pays (or paid) more than 90 days from the due date; but not more than 120 days or four late payments.
  • Pays (or paid) more than 120 days or more than four late payments; but not yet rated R9.
  • Makes regular payments under a consolidation order, credit or similar arrangement.
  • Resumption of possession.
  • Bad debt, recovery or disappeared.

How is my credit rating calculated?

EQCredit and TransCredit have different ways to calculate your credit rating, but no matter the credit bureau, the following factors are taken into consideration.

  • Credit applications. Making repeated credit requests negatively affects your credit rating.
  • Credit history. Plus your accounts have a long history, if it is positive, the better your credit rating.
  • Balance due. It is better to keep your balance low (below the 50% mark). So for a $ 10,000 credit card, it’s best to keep the balance under $ 5,000.
  • Proportion reimbursed. The closer you are to having fully repaid your loans (car, mortgage, etc.), the better your credit rating will be.
  • Number of creditors. You should keep your number of creditors low because a high number of loans is harmful to your credit rating.

How to get my credit report?

The law states that you have the right to obtain a copy of your credit file without charge. To do this, you must complete a form and send it by mail.

Alternatively, you may also obtain a copy of your credit report and credit rating online from the respective EQCredit and TransCredit sites. Fees apply to this type of request.