Bankruptcy - Personal Services

Your Credit Rating

Although we may not give it much thought on a day to day basis, credit is a very important part of our lives. We rarely pay cash for anything; we purchase goods and services with credit cards, have mortgages, loans and lines of credit. These credit facilities are available to us on the basis of our credit rating. The better our credit rating and credit score, the more credit we are offered.

What is a credit rating?

A credit rating is a measure of how you pay your bills. Do you pay your bills - utilities, car, mortgage, loans, line of credit, services, etc. - on time? If not your creditor(s) may report you to a credit bureau (privately run companies that supply and exchange information on how you pay your bills) and as a result you may have difficulty obtaining credit in the future.

What is a credit score?

A credit score, established on the basis of how you pay your bills, determines your credit risk. There are many factors that go into establishing a credit score. These include but are not limited to:

  • Payment history
  • The amount of credit you owe
  • Credit usage
  • Credit experience
  • Acquisition of new credit
  • Types of credit established

What is a credit report?

A credit report is a file maintained by one of Canada's major credit reporting agencies containing your credit history. The first time you applied for credit or attempted to borrow money your file was opened. Companies that have extended you credit or loaned you money will send regular reports to credit reporting agencies so that at all times there is an accurate snapshot of your credit worthiness. Lenders use your credit report when deciding whether or not to give you credit.

How can I get a copy of my credit report?

Canada's two major credit reporting agencies are Equifax Canada and TransUnion Canada.

  1. Equifax Canada: 1-800-465-7166
  2. TransUnion Canada: 1-866-525-0262

Contact these companies directly for information on how to obtain your credit report.

What's the best way establish a good credit rating?

The best way to establish a good credit rating is to pay your bills on time. If you are going to be late with a payment, contact the lender and advise them when you will be able to make a payment. In order to establish a credit rating you must be using credit so in the event that you are one of the few people without a credit card, apply for one but only if you can make your payments on time.

Contact Ira Smith Trustee & Receiver Inc. for more information all matters related to credit including rebuilding credit. Building back a good credit rating is an essential part of Starting Over, Starting now you can live a debt free life.