Imagine finding out you have bad credit the day you apply for a mortgage or new apartment, or getting turned down for a loan you need. It happens more often than you’d think. Your credit report is one of the most important snapshots of your financial life — and ignoring it can cost you real money and opportunities.
Your credit report and credit score are key parts of your financial health. When you don’t check them regularly, you run the risk of surprises, unnecessary costs and missed opportunities. On the flip side, taking action now can help you borrow smarter, buy easier or even get a job.
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Why your credit matters
Your credit report provides a summary of your credit history, covering things like loans, credit cards, payment history and other debt‑related information. Your credit score is a three‑digit number designed to show how well you manage credit and how risky you’d appear to a lender.
In Canada, credit scores range from 300 to 900, and the higher your score, the better your financial footing. A score above 760 is considered excellent and can help you qualify for the best rates and credit offers. Scores between 725 and 759 are generally good, while anything from 660 to 724 is seen as fair. If your score falls below 660, you may face higher borrowing costs or find it harder to get approved for new credit. According to Equifax Canada, the average credit score across the country is around 700, meaning most Canadians sit comfortably in the fair range.
Lenders use your credit report and score to decide whether to give you credit and at what interest rate. A strong credit score can help you qualify for lower interest rates on loans, better credit card offers and even better insurance rates. A weak score, on the other hand, can make borrowing more expensive or harder to get. In some cases, employers or landlords may also check your credit history as part of their screening process.
On the flip side, if there are errors in your report, or if your score is weak, you could face higher interest or even have credit applications declined.
The best chance of mitigating potential errors or other negative impacts on your report that could hinder your ability to secure a loan, job or rental, is to, you guessed it, check your credit score.
When and how often should you check it?
Good news: Checking your own credit report or score is way easier than you may think, and it does not hurt your score, contary to what many believe. That’s because checking your own credit report is considered a soft inquiry, meaning it’s only visible to you and doesn’t affect how lenders view your creditworthiness. A hard inquiry, on the other hand, happens when a lender checks your credit as part of an application for a loan, credit card or mortgage. Too many hard checks in a short period can temporarily lower your score, since they suggest you may be taking on new debt.
So you’re free to check without fear. But how often? A sensible rule: at least once a year. If something changes in your life, like you’re about to borrow, you’ve moved, you’ve had a job change or you’ve experienced a data breach, it makes sense to check more often.
Another practical tip: Use your online bank or a reputable free credit‑monitoring service to get updates. Most large banks offer one-click access to see your current credit score and many provide additional valuable information on what is impacting your score.
Read more: Here are 5 expenses that Canadians (almost) always overpay for — and very quickly regret. How many are hurting you?
Is checking Credit Karma or bank apps enough?
Many Canadians use Credit Karma or similar services to check their credit score. These tools are convenient and can give you a good snapshot of your credit health. However, Credit Karma and other free services usually provide a soft‑score estimate only and may not show your full credit report. Your full credit report includes detailed information about your accounts, balances, inquiries and collection items.
Checking Credit Karma or your bank app once or twice a year can be helpful, but it is not a substitute for a full report from Equifax or TransUnion. If you want to be certain that everything is accurate and catch potential errors or fraud, you should request your free full credit report from both major bureaus at least once a year. You can do this for free in Canada via Equifax Canada and TransUnion Canada.
What to look for when you check
When you get your report there are a few key areas you’ll want to review carefully.
- Personal information: Make sure your name, address, previous addresses and other details are correct. Inaccurate personal details could mean someone else’s history attaches to yours.
- Credit accounts and payment history: Look at each account listed — credit cards, lines of credit, loans. Check whether payments were made on time and whether balances are shown correctly.
- Outstanding debts and collection items: If there are accounts you didn’t open or debts you don’t recognize this is a red flag.
- Inquiries and new accounts: Your report will show who has asked to see your credit. Too many new inquiries may ding your score.
- Fraud or identity‑theft flags: If there are accounts you don’t recognize, or activity you can’t explain, this could indicate a form of identity theft.
What to do if you spot a problem
If you notice anything wrong in your credit report here’s the step‑by‑step course of action you should take:
- Document the error: Make a note of what is wrong — wrong address, unrecognised account, incorrectly reported late payment, etc.
- Contact the credit bureau: In Canada the two main credit bureaus are Equifax Canada and TransUnion Canada.
- File a dispute: Ask the bureau to investigate. Provide supporting documents if you have them.
- Follow up with the lender or account‑holder: If the error originates from a creditor, it is wise to inform them so they can correct their reporting.
- Monitor the outcome: After correction you should check again to make sure the incorrect item has been removed or amended.
- If identity theft is involved: Place a fraud alert or consider credit‑monitoring services. Keep copies of your communications and police reports if applicable.
You play an important role in managing and maintaining an accurate credit report. Monitoring what your credit report says should be a regular part of your financial hygeine.
How a service can be your credit safety net
You don’t have to go it alone when it comes to managing your credit. A credible credit‑monitoring service acts like a personal alert system, notifying you whenever changes appear on your report. That means you don’t have to remember to check manually every month — the updates come to you. Some banks include this as part of their premium accounts, while fintech companies often offer it at low cost or even free.
The real value is in early warning and peace of mind. You can focus on your daily life without worrying that a surprise negative item will pop up and hurt your score. If you do notice recurring problems, a reputable credit‑counselling or debt‑advice service can help you take a structured, step-by-step approach to repair and rebuild your credit.
Take charge of your credit today
Checking your credit isn’t just a task on a to-do list — it’s your financial self‑defense. By reviewing your report regularly, you catch errors before they cost you, spot potential fraud before it becomes a problem and take control of the story your credit tells lenders, landlords and even employers.
Every small step — pulling your full report, reviewing the details, fixing mistakes, monitoring changes — adds up to a stronger, more resilient financial profile. When you know your credit is accurate and up to date, you’re empowering yourself to borrow smarter, make life’s big moves with confidence and seize opportunities without unnecessary obstacles.
Checking your credit today is an investment in the freedom and security you deserve tomorrow.
FAQ
What is the difference between TransUnion and Equifax?
TransUnion and Equifax are the two main credit bureaus in Canada, and both collect and maintain information about your credit history. The main difference is that each bureau may have slightly different information on file because not all lenders report to both. That means your credit report and score could vary slightly between the two. It’s a good idea to check your report from both bureaus at least once a year to make sure all the information is accurate and complete.
Should I cancel some credit cards to improve my credit score?
Not necessarily. Closing credit cards can actually hurt your credit score because it reduces your overall available credit and can increase your credit utilization ratio — the percentage of credit you’re using compared with what’s available. Credit scoring models generally favor lower utilization, so keeping accounts open (even if you don’t use them frequently) can help maintain a stronger score. The exception is if a card has a high annual fee and you’re not using it, in which case the cost may outweigh the credit‑score benefit.
Can I get a credit card even if my credit is bad?
Yes, but your options may be limited. If you have a low credit score or a negative credit history, you might qualify for a secured credit card, which requires a security deposit that typically becomes your credit limit. These cards help you rebuild or establish credit by reporting your payment history to the credit bureaus. Over time, consistent on-time payments can improve your score, making it easier to qualify for standard credit cards with better terms.
What is the best way to improve poor credit?
The most effective way to improve poor credit is to focus on consistent, responsible credit use. Pay all bills and credit accounts on time, keep your credit card balances low relative to your limits, and avoid opening too many new accounts at once. Reviewing your credit reports for errors and disputing any inaccuracies can also boost your score. Over time, these steps show lenders that you can manage credit responsibly, which gradually strengthens your credit profile.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.