Canadian Credit Bureaus and Bankruptcy

The eye

Credit reporting agencies or credit bureaus, collect information about consumers' financial affairs and sell that information to their business members, such as credit grantors, employers and insurance companies.  The credit bureaus charge annual fees as well as a fee for each credit report requested by members.

In Canada, there are two major credit bureaus: Equifax Canada, and TransUnion Canada

Most national and international creditors, such as banks and department stores, are registered with all bureaus, so the chances are good that whatever shows up on one credit report will also appear on the others. This makes it simple for you to check your history. You really need to check only one bureau's records.

BankruptcyCanada Tip: The consumer has a right to place a 100 word statement (50 recommended) on the credit bureau file, to be given to anyone who obtains a future report.




Credit bureaus obtain their information from three major sources:

The nine point scale is as follows:

R0    Too new to rate; approved but not used.

R1    Pays (or paid) within 30 days of billing; pays account as agreed.

R2    Pays (or paid) in more than 30 days, but not more than 60 days, or one payment past due.

R3    Pays (or paid) in more than 60 days, but not more than 90 days, or two payments past due.

R4    Pays (or paid) in more than 90 days, but not more than 120 days, or three or more payments past due.

R5    Account is at least 120 days overdue, but is not yet rated 9.

R6    (Code 6 does not exist.)

R7    Making regular payments under a consolidation order or similar arrangement.

R8    Repossession (indicate if it is a voluntary return of merchandise by the consumer).

R9    Bad debt; placed for collection; skip.

The FICO® score

The FICO® score, developed by Fair, Isaac (the pioneer in credit scoring) is a number between 300 and 850 that lenders use to determine your credit rating. A FICO® score is a snapshot of your credit rating at a particular point in time. The higher your credit score the more likely you are to be approved for loans and receive favorable rates.

Credit score is a figure which is generated by an algorithm which is based on the information in the credit report, as compared to the information on millions of other people.

Equifax's policy regarding bankruptcy, proposals and other information is as follows:

(Note: TransUnion's policies varies from Equifax's insomuch as for Ontario, Quebec, NB, PEI and Newfoundland and Labrador bankruptcy information is removed 7 years after the person's discharge from bankruptcy.)

CREDIT INQUIRIES TO THE FILE: An Inquiry made by a Creditor will automatically purge three (3) years from the date of the inquiry. The system will keep a minimum of five (5) inquiries.

CREDIT HISTORY AND BANKING INFORMATION: A credit transaction will automatically purge from the system six (6) years from the date of last activity. All banking information (checking or saving account) will automatically purge from the system six (6) years from the date of registration.

VOLUNTARY DEPOSIT - ORDERLY PAYMENT OF DEBTS, CREDIT COUNSELING: When voluntary deposit OPD credit counseling is paid, it will automatically purge from the system three (3) years from the date paid.

REGISTERED CONSUMER PROPOSAL: When a registered consumer proposal is paid, it will automatically purge three (3) years from the date paid or 6 years from the filed date. So, if a person files for a consumer proposal, and defaults on it, it will stay on his credit report until 6 years from filing. If a bankruptcy follows a proposal, each will run its term. It will not be 14 years as it is for two bankruptcies.

BANKRUPTCY: A bankruptcy automatically purges six (6) years from the date of discharge in the case of a single bankruptcy. If the consumer declares several bankruptcies, the system will keep each bankruptcy for fourteen (14) years from the date of each discharge. All accounts included in a bankruptcy remain on file indicating included in bankruptcy and will purge six (6) years from the date of last activity.

JUDGMENTS, SEIZURE OF MOVABLE/IMMOVABLE, GARNISHMENT OF WAGES: Will automatically purge from the system six (6) years from the date filed.

COLLECTION ACCOUNTS: A collection account under public records will automatically purge from the system six (6) years from the date of last activity.

SECURED LOANS: A secured loan will automatically purge from the system six (6) years from the date filed.
(Exception: P.E.I. Public Records: seven (7) to ten (10) years.)

Credit Reporting Acts Protect Several Rights of Consumers:

  1. The Act applies only to consumer transactions.
  2. Reports may be given to a person seeking information only for the purpose of: extending credit or collecting a debt; a tenancy inquiry employment or insurance verification under authority granted by a government statute otherwise, as a direct business requirement.
  3. Before a person may obtain a report, she or he must: have the consumer's consent in writing, or notify the consumer by mailing a notice postmarked at least three days before obtaining the report.
  4. If a consumer is denied credit or has an increased cost as a result of information obtained in a credit report, the person must be notified promptly by the person denying credit.
  5. The consumer has a right to place a 100 word statement (50 recommended) on the credit bureau file, to be given to anyone who obtains a future report.
  6. A consumer has a right to see the file and has a right to receive a copy of any report.

Purchase your credit report online for $15.50

Get a Free Copy of your Credit Report by using the form below:

You can Download this form in Word 97/00 Acrobat.
(You can get a free Acrobat reader by clicking on the icon below)


Acrobat

Protection for Ontario residents effective January 1, 2008 (Bill 152).

Effective January 1, 2008 a consumer will be able to require a consumer reporting agency to include an alert in the consumer’s file warning persons to verify the identity of any person purporting to be the consumer.  The consumer reporting agency will be required to give the alert to every person to whom information from the file is disclosed.  If a person receives an alert in connection with certain transactions, the person who received the alert will be required to take reasonable steps to verify that the person involved in the transaction is the consumer.

If a consurmer wants this protection he or she is required to advise the credit bureau.

Equifax has advised that if a consumer requests the alert notification they will post the following in the Consumer Statement segment:

**** WARNING ****ALERT TO VERIFY CONSUMER'S IDENTITY - PLEASE CONTACT CONSUMER AT (000) - 000-0000 BEFORE EXTENDING CREDIT

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