Credit Counselling Services of Atlantic Canada, Inc.
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Credit Counselling Education Services of Atlantic Canada, Inc.

Credit Report

A credit report is a snapshot of your credit history and is one of the main tools lenders use to decide whether to give you credit. 

Basically, it is an accumulation of information about how you pay your bills, repay any loans, how much credit you have available, what your monthly debts are, and other types of information that can help a potential lender decide whether you are a good credit risk or a bad credit risk. When you sign documents, such as a loan or a credit card application, you are allowing that organization to check your credit history.

If your report says you don't pay your bills on time or that you have a lot of debt you may not get that loan -- or you may get it but have to pay a higher interest rate. While the report itself does not say whether you are a good or bad credit risk -- it provides lenders with the data to make the decision themselves.

Because it can have such an impact on the things you do in your life, you should make sure that your credit report is accurate and that you understand how it affects the credit you can get.

The credit-scoring secret is more closely guarded than KFC’s secret recipe or the Cadbury secret.  Nobody really knows the exact calculation used but some of the major categories include the types of credit you have used, your payment history and the amounts owed.  Read our “Know the Score Dos and Don’ts of Credit” information to learn more.

In order to maintain good credit you must:

  • Always pay on time (due date)
  • Make the minimum payment
  • Minimize the amount of open credit lines
  • Keep your balances below the credit limits
  • Close any unused accounts
  • Only apply for credit when necessary
  • Clear up any unpaid or past due accounts
  • Check your credit report annually to ensure it is accurate.  This can also protect you from identity theft/fraud.

If you want to find out what your credit rating is, or if you think there may be an error, contact a reporting agency such as Equifax or Trans Union.

 

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