Getting your adult report card: the credit report

So I got my report card the other day.

I’m talking about the adult report card: your credit report.

There’s something slightly alarming about having all your debts collected into one report (especially if you have student loans.)  Yet obtaining your credit report is necessary to evaluate how you’re handling your debts and payments.

I ordered mine because when I went to open up a bank account, there was already someone listed with my name, middle initial and all.  True, the birthdate was different, as was the social insurance number and address.  However, with identity theft a concern in this virtual world (thanks Facebook) I wanted to ensure no one was opening up credit cards in my name (not that they’d get far… ha!)

Canadians can obtain their credit reports through Equifax and TransUnion.  These companies collect your debts like a squirrel hoards acorns.  Credit cards, student loans, car loans… you name it, they’ve got the dirt on it.

Ordering your credit report by written petition is free.  These companies are supposed to mail your information to you for no charge.  If you’re like me, and require instant gratification, you can get your reports online for a nominal fee.  Equifax requires you to use your main credit card as another way to verify your identity.

The best part of your credit report is not the listing of your debts (in fact, that’s the worse part.)  No, the fun part is your credit score, your mark if you will.

Equifax and TransUnion have different scores, but they allow you (or anyone who is deciding whether they should loan you cash) to see where you rank.

For Equifax, your FICO score ranges between 300 and 900.  Basically 300 means no one should ever loan you money, even your grandmother.  A score of 900 means you’re Donald Trump and don’t need to borrow any money.  Most Canadians float somewhere between 650 to 849.

Lenders can look at your score to determine if you’re a high risk (300) or low risk (800).  If you have a lot of credit cards which are maxed to the limit, be prepared to sit on the lower end of the scale.  Paying everything on time also keeps your score in the high range.  Oh yes, and the more credit inquiries you make, the higher your score becomes because “they” assume you’re desperate for money and about to fall off the financial wagon.

It’s all about statistics.  Approximately 78 percent of people with low scores (up to 499) will become delinquent (90 days past due or worse.)  The Donald Trumps of the world (the Sobeys, the Irvings) are somewhere in the one percent delinquency range with their fancy schmancy 800 plus scores.

TransUnion has a similar point system, though it ranges from 300 to 900.  I prefer the little chart that shows whether you’re very poor, poor, fair, good, very good.

It’s important to check in on your credit report every now and then.  It gives you the opportunity to take stock of your financial prowess (or lack thereof) and make sure no one is trying to open offshore bank accounts in your name.

Request your report from both Equifax and TransUnion to get a complete financial history (some companies only deal with one.)  If you want to spend the money, both companies offer credit monitoring for a low monthly fee, which alerts you to any mysterious activity in your name whether a stranger is monkeying with your name or you’ve done it to yourself and tried to repress the memory.

The important thing to remember?  No panicking.  Just because you have a particular score doesn’t make you a bad person or inept at handling money.

You should always remember the basics when it comes to keeping your credit in check: pay off as many of your credit cards as you can (if not in full), don’t apply for too much credit (heaven forbid you would get it), and keep on top of your loan payments.  If your credit is questionable, these tips will help you restore your good name.

Now excuse me while I take my credit report and go cry.

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