Trilliums in Northern Ontario
Northern Ontario




Credit Counseling with the Sudbury Community Service Centre

Your Credit Rating

Your credit rating represents your reputation in the financial community, indicating your ability to handle debt. Yet, even though this information is readily available to others and can affect everything from buying a car to getting a job, many people have no clue what their rating is.

What is a credit rating?
"Credit ratings are a big mystery," says Linda Morel, executive director of the Sudbury Community Service Centre, a nonprofit organization that helps people with credit problems. "We hold a lot of workshops and whenever we talk about credit bureaus, hands go up and people start asking questions. It's not well understood."

Credit bureaus are private institutions (governed by provincial laws) that compile your credit history from public records, banks, retailers and lenders, and then sell this information to their clients. The bureau judges your credit-worthiness and assigns you a rating, based on a nine-point scale.

How does my rating affect my life?
Missed payments, frequent requests for additional credit and insufficient or outdated information can result in a bad credit rating.

A poor rating can prevent you from renting an apartment, financing a new car, qualifying for insurance, landing a job or obtaining a loan. Landlords, credit grantors, insurance agents and employers can access your credit rating and analyze your previous payment patterns to determine your financial character.

Why should I check my rating?
According to the Canadian Banker's Association, you should check your credit record if you are unsure of your rating, have been denied a loan or are about to apply for a substantial amount of credit, such as a mortgage.

"I recommend checking your rating once a year," says Linda Morel, �the number of occurrences in identity fraud and false credit card purchases in on the rise.�

By obtaining your credit record, you will be able to track your payments, ensure there are no inaccuracies, obtain a list of people who have inquired about your rating and protect yourself against identity theft.

"Even people who are not financially active should check their rating regularly," warns Ms. Morel. "Identity theft has become a big problem over the past few years, and non-active credit seekers, like retired people, are prime targets."

How do I get my rating?
As a consumer, you have the right to know your credit rating. You can get a free copy of your report by sending a written request with copies of two pieces of identification to the major credit bureaus in Canada: Equifax Canada Inc. and Trans Union. Ms. Morel suggests writing to both bureaus. "Even though they carry similar information, it may come from different sources."

How do I rebuild my rating?
If your poor credit rating is due to an error, contact the credit bureau immediately. "If someone disputes their rating, the onus is then on the credit reporting company to investigate it," says Ms. Morel. The information you are challenging may be removed from your record, or the bureau may attach a note that indicates your information is "in dispute."

According to Ms. Morel, you also have the right to place a 100-word statement explaining your poor credit rating on your file, to be given to anyone obtaining your report in the future.

Be wary of companies that promise a quick fix for a fee. "No one can erase bad credit," says Ms. Morel. Though your rating can fluctuate, any history of delinquency (a rating of R2 or higher) remains on your record for six or seven years, depending on your province.

If you require further assistance, there are numerous government agencies and nonprofit organization available to help you change your unhealthy credit habits. Says Ms. Morel: "Why pay someone when you can get counselling for free?"

For more information contact the Sudbury Community Service Centre at or .



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