A credit check is when you or an organization requests access to the information included in your credit report. You can request a copy of your own credit report at any time (you have access to a free copy a year, you will have to pay a fee for additional copies) to help you keep track of your credit history and better manage the problems you might encounter. An organization can request a copy of your credit report to help them make decisions about you and your creditworthiness.
Who can apply to see my credit report?
There are federal and provincial laws that govern who can legally request access to your credit report. This means that only you or the organizations with which you do business can view the information included in your credit report. In order to have access to your credit file, an organization must be in the process of:
- Obtain credit or loan approval (banks, credit card companies, lenders)
- Trying to collect a debt (banks, lender, creditors)
- Hire yourself (any employer)
- Rent an apartment or house (a building owner or manager)
- Prove that you have insurance (insurance)
Investigations related to credit
A credit-related survey is usually conducted by an organization that is looking to give you credit or to provides you with a loan. These types of inquiries greatly affect your record and every time such a request is made, your credit rating will go down a few points. Too many of these claims in a short period of time could negatively affect your credit rating. Every time you have a credit check done, it will appear in your file and stay there for 3 to 6 years, depending on the credit bureau.
A non-credit inquiry is when you request a copy of your credit report. This includes, but is not limited to:
- An organization that needs to verify your identity
- A potential employer
- An owner
- An insurance provider
- For fraud detection
Your credit rating will not be affected by this type of query. In general, you must give your consent before an organization conducts a credit investigation for these purposes unless it has legal authorization.
An account evaluation can be done by organizations that are already doing business with you. This type of survey can help an organization:
- Account Renewal
- To modify pre-existing boundaries
- You pre-approve for another service
A file review does not affect your credit rating and will not be visible in your credit report. No other organization will see these requests.
How often should you check your credit report?
Since all Canadians can apply for their free credit report each year to each of the credit bureaus; once a year is a good starting point. For the consumer, checking his credit report once a year keeps track of these accounts and ensures that there are no problems. For those looking to make serious financial changes or who are currently experiencing financial problems, it may be in your interest to check your credit report every 6 months.