What Is A “Good” Credit Score in Canada?

In Canada, to have a good credit score you want to aim for a credit score above 700. Even though “good” technically starts at 660, getting your credit score above 700 is going to open up many new options for you. People with a good credit score in Canada have access to far better interest rates across all credit products, plus a better chance at getting approval for the credit products you apply for.

What is the average credit score in Canada, and how do you rank among average Canadian credit scores. Often, Canadians want to know how they measure up to other people when it comes to their credit score. Is your credit score better than the average credit score in Canada? Maybe it’s worse?

First, let’s answer the question you are here to find out – what is the average credit score in Canada?

While credit scores in Canada range from 300 – 900, the average credit score in Canada is around 650, according to TransUnion, though it varies province to province. Once you’ve reached a credit score of 650 or higher, you’ll be able to qualify for more financial products. A credit score below 650 is going to make it hard to qualify for new credit, and anything you are approved for will likely come with very high interest rates.

Understanding The Credit Score Ranges In Canada

The range of credit scores you can have in Canada is between 300 and 900, with the higher the better. Here’s a quick breakdown of what each credit score range means:

Excellent credit (A credit score of 760-900)

If your credit score falls within the excellent range, the world is pretty much your oyster. You’re almost guaranteed approval for any financing you apply for should your income support the payments. You’re also going to be offered the best interest rates and be able to save loads of cash on your borrowed money.

Good credit (A credit score of 725-759)

If your credit score is good, you’re still going to get decent interest rates but it’s worth it to spend a short period of time working your way up to excellent credit, just to be able to unlock even better interest rates. The few months of being patient and disciplined could save you thousands of dollars in the long run.

Average credit (A credit score of 660-724)

Similar to a good score, you’re probably going to get approved for credit you apply for and you might get some okay interest rates, but it wouldn’t take you that long or very much pain to get up there to better score. Take the time to build your score from here, then apply for credit. You’ll save a ton.

Poor credit (A credit score of 560-659)

You likely won’t be approved for much, outside of secured credit products with scores in this range. Interest rates you’re offered will be high.

Very Poor credit (A credit score of 300-559)

Similar to the poor range, your score is going to limit you to secured credit products with very high-interest rates.

Ways to Build Credit

If you’re on the lower end of the credit score spectrum, the first thing you need to realize is that your situation is not hopeless. Even those who’ve been through a bankruptcy or consumer proposal can recover and they can do it quicker than you might realize. You can rebuild your credit with a little discipline, sacrifice, and determination and you might even accomplish this faster than you expect.

The first step is making the decision that you’re committed to improving your credit score. From there, you can make several choices. A secured credit card will require some funds up front, but will do wonders to improve your score pretty quickly. It’s the same with a secured line of credit from your bank or credit union.

The best method to improving your credit score in Canada is saving, paying off debts, and a little help from a Refresh Financial credit builder program.

LEAVE OLD DEBTS ON YOUR CREDIT REPORT

You can’t improve your score if you don’t have any credit to begin with. Young people and new Canadians often run into this problem because they are just starting to establish themselves financially. 
It’s a good idea to keep old credit accounts open because the longer your history of using credit responsibly, the better. Having an old debt that was paid off as agreed can be a boost for your overall credit score.

CORRECT ERRORS IN YOUR CREDIT REPORT

It’s a good idea to check your reports at least once a year to make sure all of your information is right. If you notice any errors or incorrect information, contact the credit bureaus and ask for a correction. Errors could include someone else’s information in your file, debts listed that aren’t yours, debts that have been paid in full and incorrect payment history.

INCREASE YOUR CREDIT LIMIT

A lot of folks think that Increasing your credit limit just means giving yourself the opportunity to spend beyond your means. But, not necessarily. Increasing your credit limit can have a number of upsides if you manage your credit wisely, but mainly it will lower your overall credit utilization and increase your score provided you keep your utilization low and make your payments on time.

PAY YOUR BILLS ON TIME

Punctuality is key, as they say — in life and in credit repair. Your payment history accounts for roughly 35% of your credit score. If you are regularly making late payments on your credit cards or student loans, your score is going to take a big hit.

SET UP AUTOMATIC PAYMENTS

If your credit score is suffering due to past missed or late payments, you should consider setting up automatic payments for those debts that have fixed payments. This includes, but is not limited to student loans, personal loans, mortgages and car loans. This way you’ll never forget to pay a bill again, which can seriously hurt your credit score.

USE YOUR CREDIT MORE

This tip might seem counterintuitive, but one of the best ways to repair your credit score is to use your credit more often. Credit is built on your ability to use credit and pay it back responsibly, which shows you are able to manage your finances. Continue using your credit as long as you are able to repay it on time.

OPEN A SECURED CREDIT CARD ACCOUNT

One way to build your credit history is by opening a secured credit card account. This kind of account require a deposit upfront, but can be used like a regular credit card. A secured card is good for someone with no credit history or a poor credit score who may have a harder time getting approved for a credit card or a loan.

KEEP A LOW CREDIT CARD BALANCE

Keeping a high balance on your credit cards is not good practice. Maxing out your credit cards month-after-month and not paying them off can affect your score because credit bureaus compare how much credit you use to the amount of credit you have available. As a rule of thumb, it’s a good idea to keep your credit to less than 30% of your available credit. For example, if your card has a credit limit of $2,500 you should only be using $750 of that each month.

MONITOR AND REQUEST A COPY OF YOUR CREDIT SCORE

You can get free credit reports from the two largest credit bureaus in the country, Equifax Canada and TransUnion Canada. Simply send in some basic information and wait two to three weeks for your report to arrive in the mail. You can also get access it immediately online from both companies for a small fee. 
Your three-digit credit score is the most important number in your report because it gives you a picture of the overall health of your credit. Your report includes a lot of additional details about specific accounts, which can be overwhelming to sift through if you’re not sure what you’re looking for. The Government of Canada has a great online explainer and sample credit reports so you can figure out those other numbers (and sometimes letters) mean.

So many financial services providers use your credit history when deciding what offer you qualify for, it’s no wonder your credit file is an important aspect of your finances.

Essentially, the information in your credit history is used to generate a credit score. And building good credit score is important if you want access to the best terms for financial products.

Whether you are applying for a credit card or a loan, your credit matters. The better your credit, the more likely you’ll be approved for a loan — and get a lower interest rate.

If you want access to the best terms when it comes to financial products and services, here’s everything you need to know about how to build good credit from scratch.

Is your credit file too thin?

Since credit scores are based on information in your credit report, you can’t be assigned a score if you have a thin file.

In 2015, the Consumer Financial Protection Bureau (CFPB) released a report indicating that about one in 10 consumers (approximately 26 million) were credit invisible in 2010. The CFPB considers a consumer’s credit invisible if they haven’t used credit to generate a report.

On top of that, there are an additional 19 million consumers with a credit report with information that is too old or too little to calculate a reliable score.

If you have no credit history, or if you have a thin file, it can be difficult to get a loan when you want one. Even getting a credit card can be challenging when you don’t have a thick enough credit history.

Therefore, if you expect to apply for a loan at some point, get approved for an apartment, or get the best rate on your insurance, you might want to learn how to build good credit from scratch.

How long does it take to build credit?

The good news is that it doesn’t take too long to build up a credit history.

According to Experian, one of the major credit bureaus, it takes between three and six months of regular credit activity for your file to become thick enough that a credit score can be calculated.

How thick your file becomes depends on how many loans you get during this time. And, how often you use credit.

One of the fastest ways to build credit is to get a credit card. However, if you have a thin file, you might end up with a very small credit limit.

Or, if you don’t qualify for a “regular,” unsecured credit card, you can also apply for secured credit card. A secured card does require a security deposit. However, it’s easier to get approved for this type of credit card when you have a thin file.

At the end of the day, credit cards can help you build credit faster because of how often your information is reported to credit bureaus.

Many credit card issuers report information about your credit card balance and payment each month. So if you make a purchase or two each month and then pay them off, that will be reflected in your credit history.

Both FICO and Vantage Score heavily weigh payment history, as well as how much of your credit you are using.

Therefore, each time you make an on-time credit card payment and maintain your outstanding balance below 30 percent of what’s available to you, you create positive information for your credit report.

Why is it so easy to destroy credit?

Unfortunately, it’s much harder to build good credit than it is to destroy it. While it takes three to six months just to accrue enough information in your file to be issued a credit score, it can take much less time to reduce it.

When you miss a payment or default on a loan, it can take your credit score down a notch. You might be surprised to find, too, that the better your credit, the larger the impact of a negative item.

In 2014, credit reporting agency Equifax reported on the impact late payments could have on your FICO score. They discovered that a 30-day delinquency on a loan could result in a drop of as much as 110 points for someone with a FICO score of 780 and no prior delinquencies.

On the other hand, the drop is only between 60 and 80 points for someone with a lower score and past delinquencies.

While a credit score is a simple shorthand for your creditworthiness, a credit report is a more complete overview of your financial history, and it’s one of the major tools a lender uses in determining whether or not to give you credit. Contained within your credit report is key identifying information like your address and social insurance number, your payment history with your creditors, a record of bankruptcies or any court judgments that would affect credit worthiness, a list of lenders or other parties that were authorized to look into your credit, and any banking or collections information.

Canadians are entitled to one free credit report per year (called a Consumer Disclosure) from either Equifax or TransUnion. Click here to apply for your free credit report from Equifax by mail, and click here to receive your free credit report from TransUnion either by mail or online. If you can’t wait a year for your free report from the credit bureau, Borrowell, a Canadian financial technology company and credit monitoring service, can give you free access to your credit score any time. I reached out to Borrowell’s CEO, Andrew Graham, to get his thoughts on the value of this new offering.

“Borrowell has recently launched free credit report monitoring. For the first time, Canadians are able to monitor important information in their Equifax credit report on a monthly basis for free online,” said Graham.

“Now more than ever, Canadians should keep a close eye on their credit and personal finances. We were proud to be the first company in Canada to offer consumers free access to their credit scores. This is a logical next step for us and gives our users a much deeper look into their overall credit profile, the same data used by many lenders, banks, cell phone providers and landlords.”

If you receive your credit report and discover any inaccuracies, inconsistencies, incomplete information or signs of fraud, you can dispute the information with the credit bureau.

What Is a Credit Rating?

A credit rating is a rating listed by some  credit reporting agencies. It is an individual rating of each of your credit history’s items detailing the type of credit being used and how quickly payments are made. The ratings for each item on your credit history are expressed on a scale of 1-9: “1” means you paid your bill within 30 days of its due date and “9” means you never paid your bill or that you’ve made a debt repayment proposal with the lender.

Along with the number, you will see a letter assigned to each credit rating. The letter stands for the type of credit being used. There’s “I” for installment (e.g. a car loan), “O” for Open (e.g. a student loan) and R for revolving (e.g. a credit card).

What Factors Influence a Credit Score the Most?

There are many factors that influence a credit score positively or negatively. Equifax and TransUnion both have slightly different formulas for determining scores, but there are a few shared considerations evaluated above all else:

Payment History – 35%

Payment history is the most important factor influencing your credit score. Lenders want to see how likely you are to pay back the credit they are about to give you, and they figure it out by looking at how/whether or not you paid back your other loans and consumer credit.

Your payment history shows all of your consumer debt except for mortgages. It details whether you’ve paid each debt as agreed, whether payments have been deferred, whether the debt has been paid off entirely, whether payments have been late or whether you have any payments in collections. Bankruptcy filing and liens against you also fall into this category.

While the exact number of points that your credit score drops for each of the above infractions is shrouded in secrecy, a general rule is that the higher your credit score is to begin with, the more points you will lose for poor payment incidents. However, if your credit score is already low, you won’t lose as many points from new negative behaviors. For example, if your credit score is 780 and you have your first 30-day late payment, your score can drop 90-110 points (more if it’s over 30 days late).  However, if your credit score is 680 and this is your third late payment, your score will only drop 60-80 points. Similarly, a foreclosure means a credit score falls 140-160 points if your original credit score was 780, but falls only 85-105 if your original credit score was 680.

Canadian credit scores are officially calculated by two major credit bureaus: Equifax and TransUnion.

They use the information in your credit file to calculate your scores. Factors that are used to calculate your scores include your payment history, how much debt you have and how long you’ve been using credit.

Pro Tip: You can view sample credit scores summaries from each bureau (see Equifax here and TransUnion here) to get a sense of what to expect.

What’s in a number?

In Canada, your credit scores generally range from 300 to 900. The higher the score, the better. High scores may indicate that you’re less likely to default on your repayments if you take out a loan.

Below you’ll see a general breakdown of credit score ranges and what each range means in terms of your general ability to qualify for lending or credit requests, such as a loan or mortgage.

Note that the ranges can vary slightly depending on the provider, but these are the credit score ranges you’ll see on Credit Karma. The best way to know where your scores stand is to check your credit report:

● 800 to 900: Congratulations! You have excellent credit. Keep reaching for the stars.

● 720 to 799: You have very good credit! You should expect to have a variety of credit choices to choose from, so continue your healthy financial habits.

● 650 to 719: This is considered good to lenders. You may not qualify for the lowest interest rates available, but keep your credit history strong to help build your credit health.

● 600 to 649: This is fair credit. History of debt repayment will be important to demonstrate your solid sense of financial responsibility.

● 300 to 599: Your credit needs some work. Keep reading for some improvement suggestions below.

How to go from good to great (or bad to good)

To borrow from Leo Tolstoy, all great credit scores are alike, but all bad credit scores are bad in their own way. That is, ideal credit scores are built on a similar set of healthy financial habits, but your scores can be damaged by any number of factors. There are many different issues that can hurt your credit, such as:

● Late or missed payments.
● Too many (or too few) open credit accounts.
● High credit card balances.
● High balances on loans.
● Too many credit applications.

The first step toward improving your credit health is avoiding getting trapped in the highs and lows of managing your credit.

Heather Battison, vice president of TransUnion Canada explains how consistency is key: “The most important factor for building and maintaining your scores is to pay your bills on time and in full each month. This activity demonstrates your ability to responsibly manage credit and can positively impact your credit scores.”

It’s also key to remember that your payment history isn’t just about paying your credit card bill. “It also includes things like your cellphone bill,” says Trevor Gillis, associate vice president of account management at TD Credit Cards.

Gillis says building good credit scores is “based on using your credit card responsibly, which means making at least the required monthly minimum payment (if you can’t pay off the balance in full), making your payments by the payment due date and keeping your credit card utilization low.”

Beware of third-party companies that claim they can quickly boost your scores. According to the Office of Consumer Affairs, only your creditors are able to alter the information on your credit file. When it comes to building good credit, there are no shortcuts.

Here’s the good-to-great news: Improving your credit health isn’t only achievable, but also the steps involved can help you establish an overall healthy financial life. Read our tips for everyday ways you can improve your credit health.

Bottom line

Help keep your credit scores as healthy as possible by reviewing your credit reports regularly to ensure they’re accurate. Making the decision to apply for a loan or credit card is a big deal – don’t let surprise scores get in the way of it.

There are ways to check your credit scores directly from TransUnion and Equifax. However, you’ll either be waiting for snail mail delivery (with the added risk of loss or theft in transit), or paying a fee for one-time online access (or a recurring cost for continued access).

Credit Karma gives you free online access to your credit score and report from TransUnion any time. Score!

Canada operates with a credit score range between 300 and 900. The lower your score, the less likely you are to be approved for a credit card or loan. If you do manage to qualify for a credit card or loan despite a low score, the interest rate you receive will likely be high.

Conversely, the higher your credit score, the more likely you are to be approved for a credit card or loan, and the lower the interest rate will likely be. Good credit can also help you rent an apartment, get a better job, get approved for insurance coverage at a lower premium and get a better plan for your cable, phone or utilities.

Excellent (741-900)

Consumers with excellent credit will likely have no or very few late payments in their credit report, will regularly pay off their balances in full, and will have a low credit utilization across all their lines of credit. Those with excellent credit enjoy rapid approval for their credit card and loan applications, as well as the lowest interest rates available, high credit and loan limits, and access to premium credit card benefits. In other words, all the financial doors are open to Canadians with excellent credit scores and banks roll out the red carpet to get their business. The median credit score in Canada is 749, which means 50% of the population has excellent credit.

*note that credit score ranges in this article are modeled on the Equifax Risk 2.0 scoring model. Designations are subjective and can vary by credit bureau and credit issuer.

Good (690-740)

Consumers with a credit score in this range still enjoy some of the best financial products and interest rates available. This credit score means you are generally financially responsible: Canadians who sit in this credit score range make most of their payments on time with only the occasional late payment on rare occasions. Their credit card utilization is pretty low given the amount of credit they have available. Those with scores in this range are unlikely to have difficulty obtaining most credit products and loans.

Fair/Average (660-689)

You still have a lot of credit options at the ‘average’ credit score Canadaevaluation, but borrowers on the lower end of this range will certainly experience higher interest rates from lenders. Those on the mid to lower end probably have been late on their payments multiple times to more than one lender and may have defaulted on a loan at some point.

Below Average (575-659)

Borrowers with below average credit will face higher interest rates for the lines of credit they are approved for, which can cost quite a bit of money over time. They also are not eligible for the more lucrative credit cards that provide accelerated levels of cash back and rewards.

Poor (300-574)

If you’re in this credit score range, you unfortunately have a significantly damaged credit history. Perhaps you have defaulted on multiple loans, your debt is very close to your credit limit, or you have declared bankruptcy, which stays on your credit report for at least seven years. In this range you will have a difficult time obtaining credit or getting approved for a loan.

Here are a few other tips to help you build solid credit from the ground up:

1. Check and understand credit reports and scores.
The two credit reporting companies in Canada are Equifax and TransUnion. Whenever a person opens any sort of account with a bank or other lending institution, any activity on the accounts is listed in these reports. Lenders go to these companies to see how big of a risk a person is before deciding to extend credit. A credit score is a three-digit number given based on the sort of credit extended by and payments made to lenders. The higher the score, the less of a risk one is considered to be.

2. Open a bank account.
“The best advice is to go into a bank branch and speak to an advisor,” says Shisler. “There’s no commitment or cost to doing so and they’ll be able to assess each individual’s situation and advise them on which account is appropriate.”

She says there are other ways to assess credit if you have no Canadian credit history, based on employment and residency status, along with your overall immigration story.

3. Open a regular or high-interest savings account.
If you show a bank or lending institution that you can save money, they may trust you with small lines of credit or credit cards.

“The Tax-Free Savings Account is a great way to take advantage of some tax-free savings if you haven’t been employed in Canada,” says Shisler.

4. Start with an overdraft.
An overdraft is limited permission to spend more than you have in the bank. It’s essentially a small loan when you need extra money; it gets paid back as soon as you make a deposit. You shouldn’t use this excessively, but using it occasionally shows you can be trusted to pay what you owe.

5. Open a department store credit card account.
These include cards from Hudson’s Bay Co., Sears and other major retailers. The interest rates are usually on the higher end (about 18-21 per cent) with lower limits, but they seem to be easier to get.

6. Apply for a secured card.
These cards are offered to those with no credit or with bad credit to help them establish a credit history. It’s the same as a regular credit card except that the credit limit is set by how much money you can put down. These cards are a little easier to get because the company isn’t taking any risks. But, of course, you still have to be responsible and pay the bill. Any activity on a secured card is reported the same as it would be with an unsecured card, so it will affect your credit. If you handle a secured card responsibly, you can eventually become eligible for an unsecured card.

7. Find a co-signer.
This is something Shisler says is an option to consider, but is not always necessary. Although it is a great way to show you can be trusted with credit, if you default on payments, you aren’t the only one whose credit will suffer — your co-signer’s will, too. Usually, the co-signer must have a strong credit history. If you don’t have any family or close friends, you may not have much luck with this option. Most people will not enter a joint credit agreement with someone unless they are very close to that person.

8. Accept offers of credit through banks.
If your bank is promoting its lines of credit, you should try to get a small credit line. If approved, your line of credit should be used regularly, but carefully, to establish consistency and trustworthiness.

9. Invest.
“Your best investment vehicle really depends on your end goals. Without knowing those goals, it’s hard to recommend any one specific investment product,” Shisler says. “That being said, there are benefits that exist in Canada that may not exist elsewhere, so make sure your advisor is educating you on the best ways available to make your money work for you. Asking the questions around what you can get out of your investments is really important.”

10. Once you have the credit, use it carefully.
The way to be trusted with larger forms of credit such as mortgages or car loans is to show you can use the credit you’ve already been given wisely.

1. Pay down revolving balances to less than 30%

Your aggregate debt and the amounts owed on all credit cards and all installment accounts make up about 30% of your credit score. The most common revolving balances are amounts owed on your credit cards. However, there is a big difference between the revolving balances of someone with a 780 credit score and a 680 credit score.

• Credit score of 680 → revolving balances of 40%-50% of their credit card limits.
• Credit score of 780 → revolving balances of 15%-25% of their credit card limits.

Essentially, don’t worry too much about paying installment accounts. They have a low impact on your score. Instead, pay your revolving balances off as soon as possible. At the very least, aim to pay those balances down to less than 30%. This will help to improve your credit score in 30 days or less.

2. Remove recent late payments

A single late payment can drop your credit score by 60 to 110 points. Yikes!

• A 680 credit score → a 30-day late payment can drop your score by 60 to 80 points. On the other hand, a 90-day late payment can drop your score 70 to 90.
• A 780 credit score → a 30-day late payment can drop your score by 90 to 110 points. In contrast, it can drop 105 to 135 points if you have a 90-day late payment.

The difference between a person with a 780 score and a 680 score is that the 780 score has no late payments, while a person with the 680 may have a 30 day late payment within the last year or a 90 day late payment 2 years ago.

Removing a late payment will take persistence. There are a couple of ways to request removal. The most common and effective way is to call the original creditor and ask for a goodwill adjustment. If they resist, you can even negotiate the removal of the late payment by agreeing to sign up for automatic payments. For other late payments, you can file a dispute against the late payment for inaccuracy.

3. Remove a collection account

People with a 780 credit score do not have any collections or other major derogatory items on their credit report. If you do have a collection account reporting on your credit report, you should try to get the collection deleted.

Do NOT just pay a collection. A paid collection usually doesn’t help improve your credit score! Instead, negotiate a “pay for delete” IN WRITING with the collector. Only when you have a written agreement should you pay a collection account, and then work on getting the account deleted.

4. Raise your credit limits

Call your credit card companies and request a raise to your credit limits. Ask if they can raise your credit limit with a soft pull of your credit since a hard inquiry will appear under the “New Credit” category of your FICO score. If you can negotiate an increase of your credit limit with a soft inquiry, then you will instantly decrease your revolving balance ratio (revolving balance divided by your credit card limits).

If you have low balances and good payment history, then your chances of successfully executing this tactic will increase.

5. Charge small amounts to inactive credit card

It’s easy to neglect older credit cards when you have a primary credit card that you use every day. If your credit cards haven’t had activity in the last six months, charge a small amount to the credit card. Creditors want to see that you are using the credit available to you as well as paying the balances off responsibly. Charging a small amount and paying off the balance shows that you have a different mix of credit in use, which makes up a portion of your FICO score.

6. Get credit

No credit equals bad credit. You need credit accounts to be reporting to your credit report in order to improve your credit score. You must have at least 1 open revolving account, even if you have no negative accounts. In addition, this revolving credit account must have been used in the last 6 months.

There are a couple of ways to get credit to improve your credit score in 30 days. One way is opening a secured credit card, with preference being given to a card that reports as an unsecured card with your credit limit to all three bureaus.

The other way is to add yourself to a seasoned tradeline. Someone with good credit history can add you as a co-signer, where you are equally responsible for all debt. Or, they can add you as an authorized user, where you are not responsible for any of the debt – and Mortgage FICO 5 will count the history as yours.

In some cases, you might not have enough credit history to have a credit score. Depending on your age, there are several ways to establish credit.

If you are under 21, you must have a cosigner or be able to demonstrate that you have an adequate source of income to pay back any credit that is extended. With responsible usage, a parent cosigning a credit card (or adding you as an authorized user to one of their accounts) is a great way to help establish a positive credit history.

For others, the best way to establish credit may be to work with your bank or credit union to open an account with a small credit limit to get you started. Opening a secured credit card is another way to get started building your credit. Then, with time and good account management, a good credit history (and scores) will be within your reach.

Common Credit Score Facts

Credit Reports and Credit History

Credit scores are not included with credit reports. Additionally, credit scores are not stored as part of your credit history. Your credit score is calculated only when your credit score is requested. Your credit score can change over time, based on your credit history—including late payments, amount of available debt, and more.

Joint Accounts

Joint accounts are meant to help individuals who cannot qualify for a loan by themselves. With joint accounts, all of the joint account holders, guarantors, and/or cosigners are responsible for repaying the debt. The joint account, along with its credit history, appears on the credit report for all account holders. When all payments are made on time, the joint account can help build positive credit. However, if someone defaults on payments, all of the joint account holders will see the default on their own credit reports. Depending on the severity of the late payments and negative information, everyone’s credit scores could be impacted significantly.

Marriage

When you get married, your credit scores (or reports) won’t merge with your spouse’s. Joint accounts you share may appear on both of your credit reports, but your credit history will remain independent.

Checking Your Own Credit

Another common question is whether checking your own credit report or score can hurt it. The answer is no. Checking your own credit scores doesn’t lower them. Checking your own credit report creates a special kind of inquiry (known commonly as a soft inquiry) that isn’t considered in credit score calculations. Without the risk of harming your scores by checking your credit report and scores frequently, don’t steer away from viewing them as often as you need to.

Want to instantly increase your credit score? Experian Boost^™ helps by giving you credit for the utility and mobile phone bills you’re already paying. Until now, those payments did not positively impact your score.

This service is completely free and can boost your credit scores fast by using your own positive payment history. It can also help those with poor or limited credit situations. Other services such as credit repair may cost you up to thousands and only help remove inaccuracies from your credit report.

Credit bureaus keep your credit history, both the good and bad aspects. Negative data can include slow or late payments, defaults or blacklisting. Of these, blacklisting is the most serious and will jeopardise your chances of getting finance. Theoretically, you should not be able to be blacklisted without being aware of it but it can and does happen. In order to ensure you are not blacklisted, it is important to check. Fortunately, this is easy.

South Africans have access to one free credit report per year. These are easy to get hold of and can be done in a minute or two online. You can also get them telephonically. Some credit bureaus have made it even easier by establishing an SMS service where you can check if you are blacklisted or not. While this is useful, it is in your interests to get your full credit report anyway.

Around 6 million South Africans are currently blacklisted so it is better to be informed than ignorant.

Do not get caught unaware when you apply for credit and make sure you look into this. It can also happen that incorrect data is on your credit report. Knowledge is power and being aware of any blacklisting will enable you to do something about it.

Blacklisting will severely impact your ability to get credit and will mean a much higher interest rate if you are able to get credit. It can also prevent you from getting certain jobs where they check your credit record.

TransUnion

One of the largest credit bureaus in South Africa, Transunion have an SMS option to find out if you have been blacklisted. The service can also give you your credit score, account status and a credit summary for a nominal fee. Remember, you can get one free full credit report per year.

In order to use the SMS service, you first have to register using the UUSD code *120*8801# from your primary cell phone number.

To view your free yearly credit report through Transunion, go to their website.

Experian

Another leading South African credit bureau, Experian, also offer you a free credit report every year. To get yours, simply register on their website.

Compuscan

Compuscan also make it easy to get your free report every year through their website.

Those are the main three but there are others as well as independent services that will give you access to your credit information. It is worth checking out to see if there are any errors or simply to make yourself aware of any issues. Either way, with a bit of effort, there are actions you can take to remedy the situation.

Take advantage of the service that is offered to check your status.