Facts about Your Credit Report and Rebuilding Good Credit

If your credit report is loaded with negative items, like late payments, overdue bills, repossessions, or foreclosures, it lowers your credit score and can make it very difficult to get a car loan or rent an apartment—and in some cases, it can even hurt job opportunities. It’s in your best interest—and your financial future’s best interest—to maintain a healthy credit score and standing.

Can I remove negative information from my credit report?

While there are non-profit credit counselling agencies that can help with rebuilding your credit, it's important to know that there are no magic loopholes for removing accurate negative information from your credit report. Only inaccurate information can be removed from a credit report, and that's something you can do yourself by filing a dispute with the credit bureaus (more on this later). So beware of any agency claiming they can remove negative items from your report through secret loopholes, and of course, at a cost. These agencies are simply credit repair scams, and they're running rampant!

Where can I get free credit building help?

If you need some guidance on how to rebuild your credit, you can visit a non-profit credit counselling agency and book a free credit building counselling session with a certified credit counsellor. During this session, they can obtain your credit report and your credit score, then provide you with different strategies that can help boost your credit score, all for free at no cost to you.

What can I do if I have negative items on my credit report?

If there are negative items on your credit report you have a few options. This includes waiting for the items to fall off your report, filing a dispute through a credit bureau, filing a complaint with the Financial Consumer Agency of Canada (FCAC), and/or placing a note on your credit report explaining the reason behind the negative item. Read on to learn more about these options.

Play the waiting game

If you’re reading this, chances are you want to improve your credit report now, not later. But one legitimate “strategy” for dealing with negative items on your credit report is to literally wait for them to be removed from your credit report. Here’s a look at how long it could take:

• Accounts in collections can stay on your credit report for up to 6 years
• Late payments remain on your credit report for 6 years
• Consumer proposals remain on your credit report for 3 years following the completion of the proposal or 6 six years after you sign the proposal (whichever one is sooner)
• Bankruptcies remain on your credit report for 6-7 years after discharge, while a second bankruptcy can take 14 years to be removed

If you’ve run into credit trouble in the past but have practiced good credit behaviour since, it might be worth checking your credit report (this won't affect your credit score) to see if any negative items will be removed from your credit report any time soon.

File a dispute

It’s not uncommon to find an inaccuracy on your TransUnion or Equifax credit report. It may show a credit card listed as delinquent, when in fact you've paid off the account and closed it a year ago. Or, you may find a medical or hydro bill that’s not yours! If you want to challenge any information you believe is incorrect on your credit report, you can file a dispute directly with TransUnion or Equifax, but be prepared to produce proof of your claim. 

File a complaint with the FCAC

If you’ve discovered errors, inaccuracies, or outdated information on your credit report and have been unable to get a satisfactory response from the credit bureaus, you can file a complaint with The Financial Consumer Agency of Canada (FCAC). This agency ensures that federally regulated financial entities comply with consumer protection measures and also raises consumers’ awareness of their rights and responsibilities. On their site, you’ll find forms to dispute inaccuracies from financial companies and credit card companies.

Place a note on your credit report

You can contact the credit bureaus Equifax and TransUnion and ask that a note be placed on your credit report indicating any extenuating circumstances that may have led you to encounter financial difficulties (and blemishes on your credit report), such as a health issue, job loss, or debt incurred by a spouse or partner.

Quick tips for rebuilding credit

• Always pay your bills on time! A minimum payment made on time is better than paying your balance in full, but late. (Like Drake says, "Better late than never, but never late is better.")
• Review your credit report at least once a year. If it contains incorrect information contact Equifax and TransUnion directly and notify them immediately.
  
• If you have missed payments, get current and stay current. Even making minimum payments is better than no payments.
• Make sure you have enough money in your bank account to cover any cheques you write. Cheques that have been returned as ‘non-sufficient funds’ may be reported to credit bureaus.
• Pay off debt rather than shift it to other accounts.
• Apply for a secured credit card. A secured credit card is a credit card you make a deposit on, with your own money, before you start using it. 

Get free help rebuilding your credit 

A poor credit report can be damaging, but we know that negative marks don’t make someone a bad person. Most often, people run into hard times, like losing a job or dealing with a medical issue, or maybe past mistakes continue to haunt them, like a previous partner they trusted that ruined their credit. Whatever your reason may be, if you’d like to speak to an expert about your credit situation, or learn more about credit repair scams before you get caught up in one, contact the professionals at Credit Canada. A Credit Rebuilding Counselling Session is free and confidential, and you'll be armed with the best unbiased information to help you move forward towards your financial goals. Call 1.800.267.2272 to book!