Whether you realize it or not, if you have a credit card, loan, mortgage or even cell phone, you have a credit report. If you're like most Canadians, you likely haven't checked your credit report and don't know how.
Even if you have checked it before – and you'll want to do so whether you're applying for credit or not in the near future – doing so can reveal if someone has committed identity theft in your name.
The Importance of Checking Your Credit Report to Protect Against Identity Theft
"Your credit report is a summary of your bill payment history," says Julie Kuzmic, Senior Product Manager with Equifax Canada. "It contains information such as mortgages you may have, loans and credit cards that may be in your name."
Julie recommends that, "at a minimum, people should check their credit report every 12 months. It's an important part of managing your personal finances."
Why Check Every 12 Months?
"Not only is it helpful in spotting possible unexpected changes in your credit report over time, but it can also help uncover identity theft or fraud," Kuzmic explains. "If you find any credit cards or loans listed on your file that aren't familiar to you, this could be evidence that someone else has opened an account in your name. The next step would be to contact the lender involved, for more information. The majority of people, however, tend to find that everything is accurate on their credit reports."
Tips for Getting Your Report the First Time
There are two national credit bureaus in Canada: Equifax and TransUnion, and it's important to get a recent copy of your file from each of them. To get a free copy of your Equifax credit file mailed to you: print out their form, fill it out and mail it to the address listed on it. For info on getting your TransUnion file, click here.
For real-time credit reports, your credit score and an interpretation of your score, you may want to purchase these from Equifax and TransUnion online for a fee.
It's great to get a free report, but keep in mind that you'll need to send some sensitive documentation through the mail to prove it's you. (You wouldn't want it to be easy for someone else to get a copy of your credit report, right?) Many experts recommend using registered mail, which means you'll likely spend about the same amount as you would buying it online.
Add a Fraud Alert to Your Credit Files
There are three alerts you can potentially place on your credit report to warn creditors that you may have been a victim of identity theft:
- Lost or Stolen Wallet or ID Alerts
- Identity Verification Alert
- Fraud Alert
"Think of these alerts as 'red flags' for those third parties that may consider extending you credit," says Kuzmic. "If there's a fraud alert on your credit report, third parties will be encouraged to take certain steps to verify your identity before extending credit in your name."
Fraud alerts vary by geographic location within Canada due to differences in Provincial legislation.
"Bear in mind the scenario where one of these alerts would come into play is when a consumer applies for new credit – such as a credit card, car loan or mortgage – and the lender checks the consumer's credit file with his/her permission," Kuzmic says.
"This is the point when the lender would become aware that there's an alert on the credit file and have the opportunity to take further steps to ensure it's not a fraudulent credit application."
An Important Part of Managing Your Personal Finances
Whether you've checked your credit report before or not, doing so annually is not only an important part of managing your personal finances, it can be an invaluable tool in helping to protect you against identity theft.
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