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How Can I Access my Credit Score for Free?

Your credit score is a tool used by lenders to view your payment history and credit-worthiness, but it is also a way for you to monitor your financial health. You can use your credit report to watch for identity theft, monitor your debt load, and maintain a healthy credit utilization.

Many commercials and online ads are aimed at encouraging you to check your credit report for free. So, let’s talk a little more about how you can, and why you should do that.

3 facts about your credit report that you should know

With so much information at our fingertips, it can be hard to decipher facts from misinformation, especially when it comes to finances. Let’s clear up any misguided info with some facts from our LIT’s across Canada:

  1. When you check your own credit score, you will NOT damage your credit. This is considered a soft hit or inquiry, rather than a hard hit, which can affect your credit negatively.
  2. Applying for new credit can lower your credit score if you do it often. When you apply for credit cards, loans, lines of credit or a mortgage, these are considered hard hits. When coupled with poor payment history, these inquiries can negatively affect your credit score and lower it further.
  3. A lower credit score can mean higher interest rates. A poor payment history or many credit cards with high balances will make you look like a high-risk borrower. In turn, lenders will charge higher interest rates on all future loans and credit cards. If possible, keep your credit card balances below 30 per cent of the maximum credit, or pay them off each month. Use this credit utilization tool as a guide.

How to access your free credit report

At least once a year, it’s a good idea to check on your credit score. It’s best to do this around the time you might be applying for new credit, a new job or, if you simply want check your score. Here’s how:

  • Ask your bank – Your financial institution may offer free credit score monitoring as a service.
  • Use a credit monitoring company such as Credit Karma or Borrowell.
  • Once a year, you can request a copy from one or both of Canada’s credit reporting agencies, TransUnion and Equifax. You can do this by filling out a form or using their automated phone service: TransUnion – 1-800-663-9980 or Equifax – 1-800-465-7166.

Tune in to our podcast to learn more about credit scores. Tell us what you’ve learned via Twitter, using the hashtags #FinLit #CreditScore

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