Maintaining a long and healthy credit history should be an important part of your financial life. Pay your bills on time, get a credit card at a young age -and use responsibly! A good history and credit score will make it a lot easier to access credit when you want, and for the best rates.
Even if you've lived the most financially responsible life, it is possible that the companies that record your credit history may have goofed up the information in your file. It is a good idea to order your credit report from one of these companies every couple of years, check the information carefully, and make sure any errors are corrected.
In Canada, the 2 major companies that record and report your financial information are Equifax and Transunion. Companies considering granting you credit (credit cards, mortgage, car loans, cell phones, bank loans, line-of-credit, etc) usually/always request a copy of your credit report before granting you access to credit.
There are 2 pieces to your credit history: credit report, and credit score. The credit report summarizes every active credit account in your name, and also records closed credit accounts for 6-7 years as well.
The credit score is a number between 300 and 900 that tells a company whether you are a risk to default on your loans. Equifax uses the FICO scoring system, and Transunion uses a proprietary scoring system. Different institutions tend to use one or the other.
You can order the full report online instantly, including score, for about $25. It is cheaper if you're not curious in the score itself, and just want the history. A free option is request it by mail - they ask for certain identifications. I went this route several years ago, and went through some frustrating iterations - forgot to photocopy the back of the driver's license as well, for example.
I ordered up both of our credit reports from Equifax the other day, just to keep them honest.
On mine, I didn't find much to worry about. Healthy score, accurate description of my credit history. The only thing they really got wrong was listing my current employer as a street address from 5 years ago. Yes, I work for "17 Pine Street"! Goes to show you how easily errors can appear on your report.
On my wife's, again nothing particularly wrong, but there were 4 old credit cards active that she didn't even have the plastic card for anymore. She called and had them all closed, which places a note "closed at consumer request" on those accounts.
And I had to laugh when my credit score was 1 point higher than my wife's!
What is your experience with credit reports? Any nightmares? Do you keep tabs on it regularly?
