Take charge of your credit

Check out your credit report
Every year or two you should get a copy of your credit report -- a history of how consistently you pay your obligations to companies that lend money or issue credit cards to you (banks, credit unions, retailers and finance companies). The credit report lists the credit cards and loans in your name. You can see the credit limits on each account, your current balance and payment history (whether you pay 30, 60 or 90 days late and how often you do that). Any information that affects your creditworthiness -- a recent personal bankruptcy or an account turned over to a collection agency -- will be there. Suppose you've been turned down for a loan or credit card. You're desperate to get funds and you want to see your credit rating quickly. Equifax Canada Inc. provides immediate online access to your credit report for a fee. You pay with a credit card at econsumer.equifax.ca.

A basic credit report costs $14.50 (no tax). An expanded report, which includes a credit score, costs $21.95. You can see how you compare to other Canadians on a scale of 300 to 900. The higher your score, the more favourably lenders look at you as a credit risk.

Find out the cause of your score
If you have a lower-than-average score, you will find out what brought it down. There may be an overdue bill that went for collection, a number of late payments or too much owed on the accounts. You will also get tips on how to improve your credit standing. To improve your credit score, don't run up your balances to the limit. Avoid applying for credit unless you have a genuine need for a new account. Too many inquiries from credit granters in a short period of time can be a sign that you have financial problems or you're overextending yourself by taking on more debt than you can repay.

Excerpted from Money 101: Every Canadian's Guide to Personal Finance (John Wiley & Sons, 2002) by Ellen Roseman.

How do you rate?
Every province except New Brunswick has consumer credit reporting legislation that gives you the right to find out what is in your file. To get your credit report from the two big credit bureaus in Canada, you have to make a request in writing. Send a letter or download an application from their websites: Equifax Canada Inc. or TransUnion Canada. Both bureaus will ask for two pieces of identification, as well as your birth date and current and previous addresses.