Canada has two credit bureaus, Equifax and TransUnion, and they hold different information. A lender may pull either. A collection can appear on one and not the other, so checking only one is checking half.
Both are required to provide your report free on request. Requesting your own report is a soft enquiry and has no effect on your score, contrary to a persistent myth.
Do this before you apply for a mortgage, not after a decline. Errors take thirty to sixty days to correct, which is longer than most condition periods.
What is on it
Identifying information. Name, addresses, employers. Errors here are common and mostly harmless, though an unfamiliar address can indicate mixed files or fraud.
Trade lines. Your credit accounts: cards, loans, lines of credit, mortgages. Each shows the limit, the balance, the payment history and the status.
Enquiries. Hard enquiries from applications, visible for around three years. Soft enquiries, including your own checks, are visible only to you.
Public records and collections. Bankruptcies, consumer proposals, judgments, and accounts sent to collection agencies.
The R ratings
Each account carries a rating from R1 to R9.
R1 means paid as agreed. R2 is one payment late, roughly thirty days. R3 is sixty days, R4 ninety, R5 a hundred and twenty. R7 indicates a consumer proposal or a settlement for less than the full amount. R9 is a write-off, a collection, or a bankruptcy.
Anything R2 or worse is a derogatory mark. R9 is the most damaging, and it is what a forgotten final utility bill turns into after a few months.
What the score is built from
Payment history, about thirty-five percent. The largest factor. Whether you pay on time, how late, and how recently. A missed payment last month hurts far more than one four years ago.
Utilisation, about thirty percent. Your balances relative to your limits. This is the fastest thing to change, because it refreshes every statement cycle. Under thirty percent of each limit, ideally under ten. Note that it is measured per card as well as overall, so one maxed card among several damages you.
Length of history, about fifteen percent. How long accounts have been open. This is why closing your oldest card is a mistake even when you no longer use it.
Credit mix, about ten percent. Having both revolving credit and instalment loans helps slightly.
New credit, about ten percent. Recent enquiries and newly opened accounts. A burst of applications reads as distress.
The mortgage-shopping exception
Worth knowing because it prevents a common mistake in both directions.
Multiple mortgage enquiries within a short window are treated by the scoring models as a single shopping event, because the system expects people to compare mortgage offers. So a focused search does not damage your score.
What does damage it is scattered applications across many months, or applying for unrelated credit while a mortgage application is live. A broker pulling once and taking that report to a panel avoids the issue entirely.
Fixing what is wrong
Errors are more common than people expect. Accounts that are not yours, balances that were paid, an account included in a proposal still showing a balance, a duplicate entry, or something belonging to someone with a similar name.
Dispute directly with the bureau, online and free. They must investigate, usually within thirty days, and contact the creditor. If the creditor cannot verify it, it comes off. Keep records of everything.
What cannot be removed is accurate negative information. It stays for around six to seven years from the date of the event. Anyone offering to erase legitimate entries is selling something that does not exist. See what lenders actually read.
The fastest improvements
Pay balances down below thirty percent of limits. Two statement cycles, and it can move a score twenty or thirty points. Nothing else works this fast.
Settle outstanding collections and get written confirmation. It may not move the score much and it substantially changes how underwriters read the file.
Stop applying for things. Every enquiry counts, and a burst of them at the wrong moment makes lenders cautious.
Keep old accounts open and use them occasionally, so they keep reporting.
Where the damage is a single recent event on an otherwise clean record, bruised credit covers how that is treated, and it is more recoverable than the score suggests.
If you are building a file from nothing rather than repairing one, establishing Canadian credit covers that sequence instead.
