If you want to know how to check your credit score for free in Canada, you’ve come to the right place. Your credit score is a numerical representation of your creditworthiness. In other words, it shows how responsible you are with money.
Knowing how to check your score can help you stay on top of it and make informed decisions when it comes to managing your finances. Plus, you’ll have a better understanding of what lenders and creditors see when they evaluate your financial reliability.
Getting approval for a personal loan, credit card, or mortgage can be challenging with credit difficulties. Most lenders use your score to assess the risk of lending you money. A higher score means lower risk for them, and hence, a higher chance of approval.
Of course, low credit borrowers can apply for a short-term loan while they work towards improving their rating. They are an excellent option for financial emergencies or bridging the gap between paychecks.
Whether you’re working towards improving your credit or you simply want to know what your credit profile looks like, continue reading to learn how to check your credit score for free. We’ll provide the details and answer the common questions about factors that may affect your overall rating.
Understanding Your Credit Score
Understanding how your credit score works is the first step towards checking it for free. In Canada, these scores range from 300 - 900 and are calculated by two major credit bureaus - Equifax and TransUnion.
These scores are based on several factors such as your payment history, credit utilization ratio, length of credit history, types of credit used, and hard inquiries on your report.
What is a good credit score in Canada?
A good credit score in Canada is anything above 670. A very good score ranges between 740-799 and an excellent score is between 800-900. Anything between 580-670 is considered below average while anything below 579 is considered poor.
Credit Score Ranges in Canada
Having a good credit score means you have a better chance of getting approved for financing with favourable terms and interest rates. It also shows that you have a responsible financial history and are less likely to default on payments.
Major Credit Bureaus in Canada
The two major credit bureaus in Canada are Equifax and TransUnion. They collect information from various sources such as banks, credit card companies, and other financial institutions to create your credit profile.
Your score may differ between the two bureaus since they may have different information on file. It’s essential to check your score from both bureaus to have a complete understanding of your creditworthiness.
How to check Equifax credit score?
You can get an Equifax credit report for free; they offer one free report to Canadian consumers each year. To get your free credit score copy, you can follow these steps:
Visit Equifax Website: Go to the Equifax credit monitoring website.
Sign Up: Look for the option to sign up for a free online Equifax credit report and score, available to all Canadians.
Start Your Online Subscription: Follow the prompts on the website to start your online subscription. You’ll provide some personal information to verify your identity.
Access Your Credit Information: Once you’re subscribed, gain access to:
A detailed overview of the factors impacting your rating.
An easy-to-read summary of the information on your Equifax credit file.
The option for Quebec residents to restrict access to their Equifax credit report.
5. Download & Print: You have the option to easily download and print your document from your online account.
Equifax provides access to consumer relations agents seven days a week for any questions or assistance you might need during the process. Remember to review the Equifax Terms of Use to understand the specific conditions, exclusions, and limitations that apply when obtaining your credit report.
Tips for Monitoring and Improving Your Credit Score
Monitoring and improving your credit score is crucial for maintaining good financial health. Taking advantage of free credit reports can help you verify the accuracy of the information listed and identify any errors that might be negatively affecting you.
Here are some tips to help you keep track of your credit rating and improve it along the way:
Check Your Own Credit Report Regularly
You can get free annual credit reports from the major creditors in Canada. You can also use online tools or services that offer more frequent access to your credit profile.
In addition, some banks and financial institutions offer free credit reporting services for their customers. These services may also provide regular updates on your file, allowing you to quickly address any discrepancies or other inaccuracies.
Dispute Inaccuracies
If you find any incorrect information on file, dispute it. Creditors are required by law to investigate errors within 30-45 days. The sooner you dispute, the sooner the incorrect information will be removed.
You can either file a dispute online or send a written request by mail, along with supporting documents. The documents can include receipts or bank statements that prove you are not responsible for the reported error.
When sending a written dispute, be sure to include the following:
Your contact details, such as your address, and phone number.
The confirmation number of your credit report (if applicable).
Highlight the details of the error(s), including the account number.
A detailed explanation of why the information is incorrect.
Photocopies of any documents that support your argument.
For added security, send your dispute letter with tracking information and request a return receipt to confirm its delivery.
Keep Credit Utilization Ratio Low
Your credit utilization ratio is the amount of credit you use compared to your total available credit. You should keep this ratio below 30%. For example, if you have a total credit limit of $5,000, try to keep your balances below $1,500.
If you have to make a larger purchase, pay off the balance as soon as possible. A long history of high credit utilization can negatively impact your score. Plus, the longer it takes for you to pay off your balances, the more interest you’ll incur.
Keep Old Accounts Open
Closing an account you’ve had for years could have a bigger impact on your credit score than closing an account that’s been open for a short time. Why? Because the length of your credit history is also a factor in determining your score. Keeping old accounts open can show a longer history of on-time payments for better credit health.
Limit New Credit Applications
Try to limit any new credit card applications if possible. Every time you apply for credit, a hard inquiry is placed on your report. A hard inquiry can temporarily lower your credit score. While not a major issue, you should be selective when applying for new credit, especially if you have less-than-perfect credit to begin with.
Take Out Short-Term Loan
You can improve your credit score through responsible borrowing. By taking out a smaller sized loan and paying it off quickly, you can show lenders that you are capable of managing debt.
Short-term loan providers can offer quick and easy financing for borrowers of all credit types. Just be sure to make all of your payments on time. Failure to do so could result in even more negative impact if the missed payments are reported.
Free Credit Scores in Canada Frequently Asked Questions
Can I get a free credit report?
Yes! You can get a free copy of your credit report using a credit monitoring service or through Equifax or TransUnion, the two main credit bureaus in Canada. You are entitled to one free credit report from each bureau per year.
There are a few ways to get a free credit report:
Online: Request an online copy on Equifax or TransUnion's websites. Provide personal details including your name, date of birth, current address, and social insurance number for identity verification.
Mail: For a physical copy, download and fill out a form from the credit bureau website and mail it with photocopies of two government-issued IDs.
In-Person: Visit a credit reporting agency's office to obtain your report directly, though availability may vary by location.
Is 700 a good credit score?
Yes, a score of 700 or above is considered a good credit score in Canada. This falls within the “good” range and can open up opportunities for lower interest rates and better terms on loans and credit cards.
Does checking your credit score lower it?
Checking your credit score only lowers it temporarily if it’s a hard inquiry. Soft inquiries, which occur when you check your score or when a lending provider pre-approves you for a loan, won’t impact it negatively. These are generally only used to verify your identity.
What is a hard inquiry on your credit?
When a lender or financial institution checks your credit report to see if you qualify for a loan or credit card, it’s considered a hard inquiry. This can temporarily lower your score and should be limited.
Multiple hard inquiries within a certain time for a home or auto loan are generally combined into one inquiry and have a lesser impact.
What is a soft inquiry on your credit?
A soft inquiry is when you check credit score for free or when a lender pre-approves you for a loan. Soft inquiries won’t affect it, as they are only used for informational purposes.
Check Your Credit Score for Free With the Help of iCash
You can check your credit score for free with the main credit bureaus in Canada: Equifax and TransUnion. Each will provide you with a free copy of your credit report once per year. You can also register with credit monitoring services that will provide you with regular updates.
Additionally, iCash offers an exclusive guide to credit scores in Canada. This is a dedicated resource centre to help you understand the factors that affect your credit rating and how to improve it. And, if you want to improve your financial health right now, our instant cash loans can help.
The application process is quick and easy - and we don’t consider poor credit as a disqualifying factor. Everyone deserves access to monetary assistance when they need it most. Plus, by repaying our loans on time, you can improve your credit score over time.
Start your journey to better credit health. Get our loans online or via the smartphone lending app, and see how iCash can help you on your path to a brighter financial future.
