Personal Finance Series 1 of X – Importance of checking your own credit and how to do it yourself

***Disclaimers: I am not responsible for any errors or omissions in my content. Nor am I responsible for any potential negative effect on your credit for following this process which I am currently not aware of. Everything here is to the best of my knowledge only. All I can tell you is I follow this process to self check my credit once a year for many years already.***

 

Before I begin, I just want to say I didn’t just make up the location of Colinville in my last post. Colinville is a real place and is located right here in Canada. I have proof from multiple legit sources:

It’s a small down in Ontario and it’s quite cold there in the winter as you can see, hence my example I only used only 10 families live there and homes are only $100,000 each.

Today I want to talk about something very important and relevant to everyone that everybody should know about, it is the status of your own personal credit. Why do I want to know the current status of my own credit you ask? As a professional in the finance industry I have pulled/reviewed/granted credits to many clients from people with low net worth to ultra high net worth. I think I have seen almost every possible scenarios there is. I am sure you have heard about the health of your credit status plays a very important role in lender’s decision to weather or not to grant you credit (ie credit cards, car loans, mortgages, etc), and at what rate. With so many sub-lenders out there nowadays, while the old saying “as long as you have a pulse, anyone can get approval for credit cards and car loans” still applies, most likely they will just charge you a much higher interest rate for it.

Being this is the very first of many blogs of personal finance, I’ll just show you step-by-step on how to obtain your complete credit profile. Unlike most things in life, you have nothing to lose in this process, but everything to gain. And this is why:

  • it’s completely FREE!!! (just like salt in Fire Stations in Vancouver on Jan 4 & 5)
  • it does not hurt your credit score*
  • it only count as a “soft” credit search request* (what this basically means is that next time a lender pull your credit, they will not see someone (yourself in this case) tried to look at your credit) But lets be honest, even if it shows as a credit search request, it will show as yourself did it, and lender will know this was not a credit-seeking request.

*This is to the best of my knowledge only

Just want to point out this report will only show all your personal credit items (called “trades”) but will not show your credit score. This is unlike some company offers out there that say “it’s free and easy to find out your credit score”. I have not personally used their methods so I cannot comment on them. But the process I will show you now is directly from one of biggest credit agency in Canada called Equifax (not from third parties which eliminates any potential bias as Equifax is not in the business of selling you a loan).

Here is the direct link to the one page PDF form that you will need to fill out and fax to their number. It will take about a couple weeks and they will mail to your address. It’s super old fashion way of doing things I know, like who does fax and snail-mail nowadays right?, but it’s free so I am not going to compliant, just like most people didn’t complaint about long wait times for free salt (the ones that eventually got the salt I mean).

http://www.equifax.com/ecm/canada/EFXCreditReportRequestForm.pdf

And here is the screenshot of the webpage of where this link is located so you know I am not giving you a secret link and steal your personal info. I have to say this is kinda hidden on their website as I feel they want to you buy their monthly credit monitor products or premium credit report which I feel is unnecessary.

equifax

Once the letter arrives, you will see a full copy of your current credit history with all your current and historical trades (aka credit items). Even some of the trades that are closed it could still be showing on your report up to many years after.

You might say hey Colin I am fully aware of all the trades I currently have and I know all is up-to-date so there’s no benefit for me to pull my credit right? waste of time in this case right? I can tell you from my personal AND professional experiences, more often than not you will find some surprises in your report. For example, most people will know they currently have a mortgage, and a car loan, two credit cards and a line of credit which is cool. But how certain are you about those department store credit credits that you opened in back in 1990s in store and used once so that you got that 10% or $10 off your first purchase that you didn’t bother to cancel? or that time in 2011 you have a statement dispute with a cell phone company and you end up not paying and they closed your account, or 3 years ago you have an unpaid parking ticket that you just assume you got away with it because they never follow up for payments again? Or sometimes bad comments are added to your report by error.

As an experienced lender, I can tell you the above sample situations do show up on people’s credit report more than you think, and this might greatly effect your credit worthiness in the eyes of the lenders.

If you are comfortable you may now go order that report and in my next Personal Finance series2 of X, I’ll show you what action you can take so you will be in best credit shape possible in your next encounter with your lender.

FYI I follow this process for everyone in my family once a year as I felt it is important to know exactly what’s on my credit, and if there are any unfavourable errors on it.

If you have any questions about this, feel free to comment below and I’ll get back to you.

If you feel this article is useful to your friends, please like and share =)

Until next time!

 

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s