Credit Bureaus: A Beginner’s Guide

A credit bureau is a private company that collects data on your financial behavior and credit history, including payments, debts, judgments, credit inquiries, and more. This information, compiled in a credit report, is used by lenders (banks, credit card companies, rental agencies, etc.) to assess your ability to repay. In Canada, the two main agencies are Equifax and TransUnion.

This system, often unknown to the general public, has a significant impact on your financial situation: from obtaining a loan and the interest rate offered, to renting a home or even securing employment.

Where do credit bureaus get your information?

Information comes from various sources to collect data about you. Examples include financial institutions where you hold credit products, collection agencies, the Office of the Superintendent of Bankruptcy, and various service providers, such as telecommunications companies.

Credit bureaus update information monthly, but not all lenders report your credit information to both agencies (Equifax and TransUnion). Some report to only one, while others report to neither. This means your credit report can differ between agencies or be incomplete. To get a complete picture of your credit, it is strongly recommended to check both reports.

What does your credit report include?

A credit report is divided into several categories:

1. Personal information: name, current and previous addresses, date of birth, phone number, social insurance number, employers.

2. Credit inquiries: who has checked your credit report, whether for approval or informational purposes, with your consent. For example, a financial institution after your request, for housing, employment, or when shopping for insurance.

3. Public records: consumer proposals, bankruptcies, collection agencies, court judgments, etc.

4. Financial history: all accounts reported by various creditors, including credit limit, monthly payment, current balance, account opening date, last reporting date, account number, and payment history. Closed accounts remain visible for 10 years at Equifax and 20 years at TransUnion.

Why are credit bureaus important?

Lenders and other entities rely on your credit report and score to:

1. Approve or deny a credit application
2. Determine the interest rate
3. Set the loan or card terms

The credit bureau only provides information; Equifax and TransUnion do not make decisions. Decisions are made by the lender.

For consumers, your credit score can affect:

1. Access to housing, employment, insurance, or credit products

2. Interest rates offered

3. Identity theft detection

4. The ability to add an alert to your file (useful after fraud or identity theft)

What is a credit score and how is it determined?

A credit score is a three-digit number (in Canada, between 300 and 900) summarizing your creditworthiness. The higher the score, the lower the risk for a lender.

Credit score ranges:

Low - 300 to 559
Fair - 560 to 659
Good - 660 to 724
Excellent - 725 to 900

For more information about credit scores, read our blog “Credit Scores: One Number, Major Impacts”

Exact formulas are confidential, but factors include payment history, debt amount and credit utilization (we recommend max 30%), account age, number of credit inquiries (max 5 per year), credit type diversity, and negative public records (collections, consumer proposals, bankruptcy, judgments).

Each credit bureau uses its own data and algorithms, so your Equifax score may differ from your TransUnion score.

How can you access your credit report?

You can get your full credit report for free from Equifax and TransUnion once per year. Other options include:

1. Online: monthly access from Equifax or TransUnion (paid)

2. By mail: submit a form with two ID pieces

3. By phone: via automated service or an agent

4. Apps: Borrowell (Equifax) and Credit Karma (TransUnion)

We recommend checking both bureaus monthly to ensure all accounts are yours and information is accurate.

How long is information kept on your credit report?

Well-managed accounts can remain for up to 10 years at Equifax and 20 years at TransUnion, providing proof of long-term financial reliability.

Negative information fades sooner but still impacts your credit score:

1. Delinquent accounts, collections, and judgments: automatically removed six years after last reporting date

2. First bankruptcy: fully removed 6 years after discharge at Equifax, 7 years at TransUnion

3. Subsequent bankruptcies: fully removed after 14 years at both agencies

4. Consumer proposal: removed 3 years after discharge at both agencies

How to maintain a healthy credit report?

Practical tips (also in our blog “Credit 101: A Guide to Best Practices”):

1. Pay your bills on time each month.

2. Keep your credit utilization below 30%.

3. Diversify credit types responsibly.

4. Avoid unnecessary credit inquiries (max 5 per year).

5. Regularly review your credit report to detect errors or fraudulent activity.

6. Quickly dispute any errors with the bureaus to ensure your report is accurate.

Credit bureaus play a major role in your financial life by providing a detailed view of your credit behavior. These reports affect your ability to obtain loans, rent housing, or even get hired. You have the right to access, correct, and protect your credit report.

Good credit management requires vigilance, understanding, and regular review of your credit reports. This helps you avoid mistakes and optimize your financial conditions in the long term.