What to look for on your Credit Report?

While reviewing a Credit Report, a lot of the information could look abstract and very difficult to understand. It is quite common for consumers to either willfully or by lack of knowledge, ignore many key details on the report. Lenders use codes to send information to the credit bureaus about how and when you make payments.

These codes have two parts:

  • a letter shows the type of credit you’re using
  • a number shows how good your payment history is

You may see different codes on your credit report depending on how you make your payments for each account

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Breaking down Letters on the Credit Report

The Letters Used

There are typically 4 types of credit and 4 letter codes to specify each one of them:

  1. Revolving or Recurring Credit (R): In this case the creditor allows you an amount of money that you can use on an ongoing basis. As a consumer, you use an amount and after you pay that amount, you can use it again. Use-Pay-Use-Pay. It revolves. There is no term. A minimum payment would be required on the due date. A good example would be a credit card or a line of credit.
  2. Installment Credit (I): Here, you would be granted a certain amount for a fixed period of time – along with a predetermined payment that comes from a predetermined interest rate. Once the loan is payed off, you would need to apply again to have access to that same amount again. A good example would be getting car financing or a bad credit car loan. 
  3. Mortgage Loan (M): This is also defined as installment credit in some cases. It refers to a mortgage that the creditor is granting for the purchase of a home. In this case, terms are defined differently. You have a total amortization period, and a number of terms within that. Essentially, if you have a 5 year term & 20 year amortization – your payment is calculated for the first 5 years and renegotiated for the next 5 year period.
  4. Other or Open Status Credit (O): The money is borrowed when needed. An example could be telephone bills or utility bills, overdraft etc.
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Breaking down the Numbers on the Credit Report


  • Too new to rate
  • Approved, but not yet used
  • Paid within 30 days of billing
  • Pays as agreed
  • Late payment: 31 to 59 days late
  • Late payment: 60 to 89 days late
  • Late payment: 90 to 119 days late
  • Late payment: more than 120 days late, but not yet rated “9”
  • This code isn’t used
  • Making regular payments using one of the following debt management options:
    • a consolidation order
    • orderly payment of debts
    • consumer proposal
    • debt management program with a credit counselling agency
  • Repossession
  • Written off as a “bad debt”
  • Sent to collection agency
  • Bankruptcy

It is very important to understand that when a lender determines a late status, it is always in reference to your payment due date. In order for an account to be R2 or I2 the consumer must not have made a payment 31 days from the due date. 

For example:

  • If you have a credit card account that you paid on time, it’ll be reported as “R1”
  • Should you have a line of credit, and you missed a payment by 45 days, it’ll be reported as “O2”
  • If you have credit card debt and you’re being contacted by a collection agency for payment, it’ll be reported as “R9”

The best rating is 1. Any number higher than 1 will likely hurt your credit score.

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Financial information on your credit report

Your credit report may contain the following financial information:

  • non-sufficient funds payments, or bad cheques
  • chequing and savings accounts closed “for cause” due to money owing or fraud committed
  • credit you use, including credit cards, retail or store cards, lines of credit and loans
  • bankruptcy or a court decision against you that relates to credit
  • debts sent to collection agencies
  • inquiries from lenders and others who have requested your credit report in the past three years
  • registered items, such as a lien on a car that allows the lender to seize it if you don’t make payments
  • remarks, including consumer statements, fraud alerts and identity verification alerts

Your credit report contains factual information about your credit cards and loans, such as:

  • when you opened your account
  • how much you owe
  • Whether you made your payments on time
  • if you missed payments
  • Whether your debt has been transferred to a collection agency
  • if you went over your credit limit
  • personal information that’s available in public records, such as a bankruptcy

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Checking for errors on your credit report

Why check your credit report?

A Credit Report is a summary of all the Trade Lines or credit Relations you have undertaken with all the registered Financing Institutions.

A Trade Line is created at the moment you are first granted credit from any of the registered financial institutions. Also when you apply for credit for the first time a Credit Report will be created even if you are not accepted for credit – this will list only an inquiry, but not a trade line.  

Financial Institutions or Lenders will send information about your accounts to the credit bureaus, also known as credit reporting agencies. A Credit report is a collection of all the dealings/trade lines you have had with any said financial institutions. It will show how good or bad you have managed your credit. If the Lender is reviewing a file and the information showing turns out to be incorrect, then decision would be conducted with faulty information. If there’s an error on your credit report, a lender may turn you down for credit cards or loans, or charge you a higher interest rate. You may also not be able to rent a house or apartment or get a job.

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Apart from errors creating the basis for an unsatisfactory dealing and result, the errors could also be a sign that someone is trying to steal your identity. They may be trying to open credit cards, mortgages or other loans under your name.

It is for the above mentioned reasons that we believe that Credit Reports should be checked regularly. A yearly check might be a good decision.

What errors could be on your credit report

Once you get your report, check for:

  • name, address, date of birth, employer and occupation.
  • errors in credit card and loan accounts, such as amounts, balances, payment amount, date open etc.
  • negative information about your accounts that is still listed after the maximum number of years it’s allowed to stay on your report
  • Make sure you are aware of all the trade lines existing there. If you see a RBC card and you never had a dealing with RBC, it is time to worry. Chances are these accounts would be in arrears.

Keep in mind that negative information does not disappear from your credit report because you paid it off. The negative information stays there for some time. Checking these trade lines would be the way to inform yourself on what might have been negatively affecting you.

Look for accounts that don’t belong to you on your credit report. Accounts that you don’t recognize could mean that someone has applied for a credit card, line of credit, mortgage or other loan under your name. It could also just be an administrative error. Make sure it’s not fraud or identity theft by taking the steps to have it corrected.

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Steps if Fraud Suspected

If you find an error on your credit report, you should contact lenders and any other organizations that could be affected. Tell them about the potential fraud.

If it’s fraud, you should:

The Canadian Anti-Fraud Centre is the central agency in Canada that collects information and criminal intelligence on fraud and identity theft.

If you are certain that the information is wrong then we strongly suggest that add a Fraud Alert (warning) in your Credit Reports. A fraud alert, or identity verification alert, tells lenders to contact you and confirm your identity before they approve any applications for credit. The aim is to prevent any further fraud from happening.

Ask the credit bureaus to put a fraud alert on your credit report if:

  • you’ve been a victim of fraud
  • your wallet has been stolen
  • you’ve had a home break-in

You may need to provide identification and a sworn statement to prove that you’ve been a victim of fraud.

Your Rights

You have the right to dispute any information on your credit report that you believe is wrong. Additionally, you can ask the credit bureaus to correct errors for free. Always support your case by gathering receipts, statements and other documents related to your credit accounts. This is since you may need them to prove your claim. Crucially, you need to report to both Equifax & Transunion, since different lenders use different platforms. Before the credit bureau can change the information on your credit report, it will need to investigate your claim. First, it will check your claim with the lender that originally reported the information. If the lender agrees that there is an error, the credit bureau will update your credit report. However, if the lender disputes your claim – and instead suggests it is correct, the bureaus will leave your credit report unchanged.

The second step would be to contact the lender that reported the information. It will not be an easy process and you need to understand that the Lender will require a lot of things in order to believe your claim. They will have to compare the information they have and the one you are suggesting to them. Importantly, you should ask to speak with someone at a higher level at the credit bureau or at your financial institution if you’re not satisfied with the results of the investigation.


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Federally regulated financial institutions must have a complaint-handling procedure to help resolve disputes between consumers and their financial institutions. This procedure includes a third-party dispute-resolution body.

Assuming that the credit bureau confirms the information is accurate but you’re still not satisfied, you can submit a brief statement to your credit report explaining your position. It’s free to add a consumer statement to your credit report. TransUnion lets you add a statement of up to 100 words, or 200 words in Saskatchewan. Equifax lets you add a statement of up to 400 characters to your credit report.

Lenders and others who review your credit report may consider your consumer statement when they make their decisions.

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How do credit cards work?

Credit Cards are considered Revolving Credit. It is very important to understand that Credit Cards have a huge impact in your Credit Report and paying them on time has a great impact on you. 

Credit Cards could be very widely used in everyday life and they could be used to pay for all kinds of goods and services.

You can use your credit card to pay for goods or services:

  • at a cash register or checkout, that is, a point of sale
  • over the phone
  • online

Keep receipts for all your credit card purchases. Check your receipts against your credit card statement to make sure there are no mistakes. If you find a mistake, immediately contact the financial institution that issued your credit card. Most importantly contact the Credit Reporting agencies in order to place a warning to stop any possible fraud in further credit granting.

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Cash Advances

A very common way of using Credit Cards is through forms of Cash Advance. You can use a credit card to get a cash advance by:

  • taking out cash at an automatic teller machine (ATM)
  • getting cash from a financial institution

A cash advance can be a very expensive way to borrow money. Before you take out a cash advance, consider a cheaper way you can borrow, such as a personal loan or line of credit. When you use cash advances, try to pay off as much of your balance as you can as early as possible.

There is no interest-free grace period with cash advances. You’ll pay interest from the date you get a cash advance until you pay it back in full. The interest rate charged for cash advances is usually higher than for regular purchases. For example, the interest rate for regular purchases may be 18%, but it may be 28% for cash advances.

You may also have to pay a fee each time you get a cash advance.

A fee may be:

  • a fixed amount per cash advance
  • a percentage of the amount of the cash advance
  • a fixed amount plus a percentage of the cash advance

Some financial institutions set a minimum and a maximum for those fees. If you apply for a credit card from a federally regulated financial institution such as a bank, the application must include an information box. The information box must present key features of the credit card, such as interest rates, fees and other charges, in a clear and easy-to-understand way.

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Credit Cheques

Sometimes it might come as a surprise to you when you see cheques in your mail attached to your credit cards bill. You can use credit card cheques to make purchases the same way you would with personal cheques. Credit card cheques are also called convenience cheques or promotional cheques. You can also use them to pay bills or other debts such as outstanding balances on other credit cards (though this can end up being a problematic infinite loop).

You’ll pay interest from the date you use the cheque. The interest rate charged when you use a credit card cheque is usually higher than for regular purchases. Credit card cheques are linked to your credit card account. If you use them to pay for goods or services, the amount will appear on your credit card statement. Federally regulated financial institutions, such as banks, must get your consent before they can send you credit card cheques. If you choose to get credit card cheques as part of a special offer, make sure you understand all the terms and conditions. If you don’t want to use credit card cheques, cut them up before you throw them out to protect yourself against fraud. Contact your credit card issuer and ask them to stop sending credit card cheques.

Balance Transfer

It is quite common for credit card companies (Visa, Mastercard…) to offer you lower than market rates. This is done for the purpose of achieving a Balance Transfer. This occurs when you pay off the balance from your current credit card by transferring it to a new card that generally has a lower rate. Be careful as these rates are temporarily low and they increase at a later time. In some cases they charge a fee for the transfer which could be in the form of a percentage of the amount transferred. Before you transfer a balance, be sure to read the terms of your credit card agreement carefully. 

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Key Elements

Here are some very important elements to know while using Credit Cards:

High Credit (Credit limit)

Your credit limit is the maximum amount you can normally spend on your credit card. The limit is set when you first get your credit card, but you can request that it be reduced or increased.

Your credit card issuer has to get your permission in writing or verbally before increasing your credit limit. This is known as giving your express consent, which means you clearly agree in writing or verbally to a credit limit increase. If you agree verbally to an increase, your credit card issuer has to confirm the change in writing no later than your next credit card statement.

Credit Card Balance

The Credit Card Balance would reflect the amount of money you have already used while purchasing goods or services. You need to understand that high balances and non payments of these balances might result in high interest payments. 

Available Credit

The available credit reflects the amount of credit still available to be used. It is normally the difference between the High Credit and the Credit Card balance. Keep in mind that Credit Card Companies might allow you to use more than the High Credit.

Due Date and Minimum Payment

The due date is a very important element in the invoice (bill) that you receive from the Credit Card Company. It reflects the time by which you must pay either the total balance left in your Credit Card or the Minimum Payment. Minimum Payment is the amount required to pay in order for the account not to be considered delinquent. It normally is the interest that the Credit Card Company charges. Please note that credit cards become very expensive because of this feature. It lets the consumers believe that it is ok to make this small payment and continue holding the balances unchanged. We strongly suggest that you try to reduce the balances. It will be saving you a lot of money in interest. The due date is what determines how late you are with making payments. 

Example: RBC provides  you with a Visa in the amount of $1000. You use $300 to purchase goods or services on 31 January 2021. The bill comes in the mail and the billing date is 8 February 20021 and gives the information that you have a payment due on 1 march 2021. Minimum payment is $35.


Based on this information:

High Credit = $1000

Credit Card Balance = $300

Available Credit = $700 ($1000 – $300)

Due Date = 1 March 2021

Minimum Payment = $35

Transaction Date = 31 January

Billing Date = 8 February 2021

Late Payments & Their effect on your Credit

If we assume that the payment of $35 was not made on 1 March 2021 you have now 30 days to make that payment. Assuming the payment of at least $35 is not made by 1 April 2021 then the account in the Credit Report will have an R2 status and reflects that you have been 30 days late in making your payment. Again, if the payment is not made by 1 May 2021 the account in the Credit Report will have an R3 status and reflects that you have been 60 days late in making your payment. Should the payment not be made by 1 June 2021 the account in the Credit Report will have an R4 status and reflects that you have been 90 days late in making your payment. Finally, if the payment is not made by 1 July 2021 the account in the Credit Report will have an R5 status and reflects that you have been 120 days late in making your payment.

Please note that after this point if the Credit Card Company has not received a payment then this account would probably end up in a R9 status or an account being written off (or considered a loss) from the Credit Card Company. 

Interest on Credit Cards

Interest is the money you’ll pay if you don’t pay your credit card balance in full by the due date. You’ll continue to pay interest until you pay your balance back in full. Interest rates vary depending on your financial institution and the type of transaction. Your credit card statement and your credit card agreement must clearly indicate the interest rates you must pay. When you make a new purchase with your credit card, you have an interest-free grace period. The grace period begins on the last day of your billing period. You can find out your billing period by checking on your credit card statement. The grace period does not apply to cash advances, cash-like transactions and balance transfers. Federally regulated financial institutions such as banks must provide a minimum 21-day grace period. In our example above, if the payment is done by 1 March 2021 you will not need to pay interests. March 1st, 2021 is the date where the grace period ends.

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Over-the-limit fees

It is crucial that you pay attention to the amount of money you use from the Credit Card – especially so if you feel that you are using more money than the High Credit. Your financial institution won’t inform you if you’re about to go over your credit limit. It’s your responsibility to pay attention to your balance and stay within your limit. If you go over your limit, you may have to pay an over-the-limit fee. Federally regulated financial institutions can’t charge over-the-limit fees if a merchant puts a temporary hold on your credit card that goes over the credit limit. A good example would be if you purchase gas. Normally federally regulated companies do not charge over the limit fees. If you’re often close to your credit card limit, you can ask your financial institution to increase your credit card limit. If you don’t want to increase your limit, or don’t qualify for a limit increase, you can ask your financial institution to stop any transactions that will go over the limit. Certain low-value transactions may still go through. Not all financial institutions offer this service. Read the terms of your credit card agreement to see if transactions over your limit will go through, and if there are any fees if they do. Ask your financial institution about anything you don’t understand.

Dishonoured payment fees

Your financial institution may charge you a fee to handle a payment that is dishonoured, or that “bounces back.”

This fee applies if you:

  • make your payment by credit card cheque and the cheque is returned because of non-sufficient funds (NSF)
  • make your payment by a pre-authorized debit that’s rejected because of NSF
  • use a credit card cheque for a cash advance, and your financial institution returns the cheque because you’re over your limit

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