Lenders Can Use Equifax To Check Your Credit File
Your credit file shows lenders what you are like as a borrower.
Lenders can check if you have open credit accounts already. They can also see if you are up to date on your payments, or if you are falling behind.
Your credit report helps lenders to assess how much of a risk you are. This may affect the amount of credit that you are approved for if any.
Your credit score could also affect the interest rate that you are offered.
Which Credit Bureaus Banks Check
When you apply for a credit card, the issuer contacts a credit bureau to purchase a copy of your credit report. Included in your report are the five categories mentioned above.
Youll notice one credit-report category, which counts for 10% of your score, is called new credit. If you have too many credit applications opened within a short period of time, it may affect your credit score negatively.
Imagine the following scenario: Youve filled out several applications for new credit in the last 12 months. These applications show up on your credit reports as hard inquiries and could potentially damage your credit scores.
You then decide to apply for another new credit card. In addition to your score potentially taking a hit, you might experience another dilemma. The bank processing your application might be concerned about why youre applying for so much new credit in a short period of time. As a result, theres a chance you could be turned down for a credit card even if your credit score is in good shape.
Knowing which credit reporting agency card issuers use to pull reports might help you avoid this problem. By understanding this concept, you can time your applications in such a way that you improve your approval odds for the credit cards you want.
Unfortunately, credit card companies dont openly reveal which credit bureau they favor. However, there are online resources that gather customer feedback to gauge which issuer uses which credit bureau.
Issuers Pull Data From Other Credit Bureaus In Addition To Equifax
Its important to remember that inquiries made by credit card or loan issuers typically impact your credit report, so they dont always use the same bureau.
Generally, banks use at least two different credit bureaus to obtain your information and either approve or reject your benefits. Equifax is usually the default bureau used, so most focus on improving your score with this bureau.
In addition, each credit bureau specializes in specific information, Equifax is an expert in fraud information, but for educational credit score information, the best is TransUnion.
The bureau chosen by creditors will depend on the information they want to obtain they can look at all of them or just Equifax. This information is complicated to determine because banks frequently do not disclose which one they will use. In conclusion, the idea is to maintain a good score in all the agencies to have better possibilities and access to better interest rates.
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Regularly Check All Three Credit Reports For Best Results
When it comes to applying for a new credit card, you can do a lot to improve your odds of approval by simply applying for the card for which you are most qualified. While it may be tempting to try and nudge the odds by selecting cards from issuers that only pull from the bureau with your cleanest credit report, the unfortunate truth is that there really is no controlling or accurately predicting which bureau will be queried.
The easiest way to ensure your credit always looks its best is to regularly check all three of your credit reports, which you can do once a year for free through AnnualCreditReport.com. Like my aunts periodic trips from room to room to double check that everyone was where they were supposed to be and had the correct number of pieces routinely keeping up with your credit report can go a long way toward keeping your financial house in order.
Whats A Good Credit Score
So, what is a good credit score, anyway? Lets start at the beginning.
According to the Government of Canada, a credit score is a 3-digit number that represents how likely a credit bureau thinks you are to pay your bills on time.1 It can be an important part of building your financial confidence and security.1 For example, building a good credit score could help you get approved for loans and larger purchases, like a home.1 You may also be able to access more competitive interest rates.1
There are two main credit bureaus in Canada: Equifax and TransUnion.1 These are private companies that keep track of how you use your credit.1 They assess public records and information from lenders like banks, collection agencies and credit card issuers to determine your credit score.1
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Ensuring An Accurate Credit Report
Your credit reports are the official place to confirm your credit score and complete history of credit activity, but even then, errors may abound both when youre requesting your reports, and afterward.
Double check your personal information. A misspelled word or an inverted number in your address or Social Security number could prevent you from accessing your report. Make sure all your personal information is correct before sending out your application.
Manage trick questions. There may be some deliberate trick questions during the verification process used by AnnualCreditReport to verify that you are actually you. They may ask if youve lived at any of the three listed addresses or had a car or student loan through a list of lenders. If none apply, remember to click none of the above. If youre unsure, its best to go back and confirm your own personal history, like where youve lived, if youve rented/owned, where youve worked, and whom youve had credit with, especially if the information is several years old and hard to remember.
Dont worry if you cant get copies of all three credit reports just yet. But if youre looking for credit through a certain bank, request the credit report from the reporting agency they tend to use most often.
Heres what to look for:
Follow these links to each credit bureaus credit report dispute/investigation process:
Your Rights To Access Credit Information
You can access credit information a bank holds about you and request to amend any incorrect information at the time of application.
You can also ask another credit provider to correct your credit report, but its usually faster for you to go directly to the CRB or credit provider that listed the information.
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Which Credit Bureau Is Used
Ive included a table indicating which credit bureau in Canada each issuer uses. These are general guidelines and are not strict rules. The credit bureau that each bank checks may vary depending on the individual consumer. However, the majority of applicants have the same results as this table. Ive added a list of which Canadian credit bureaus are pulled by major credit card and other financial issuers. If you have any additional data points youd like to contribute, please send me an email. Most of this information is from various online resources including RFD, and pretty much match my own credit history with the bureaus. The split pretty much is right down the line Equifax and TransUnion are pulled equally.
Have You Been Declined
If your bank has declined your home loan because of your credit score, then the worst thing you can do is apply with several more lenders and end up with a decline from them as well!
Each application will lodge an enquiry on your credit file, further reducing your credit score for future applications.
Instead, if you or give us a call on 1300 889 743, then one of our mortgage brokers can fully assess your situation. We can help you to identify why you failed their credit score, and help you to apply with the right lender this time.
Remember that there are many lenders that do not credit score and still have competitive interest rates, you just need to know which ones they are!
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How Does Being An Authorized User Affect Your Credit
There are a few ways that becoming an authorized user can impact your credit.
Authorized user accounts may be included in your credit report and can help you improve or build your credit history. When the primary cardholder has a history of responsible credit behavior which may include on-time payments and a low level of debt compared to available credit the account could also improve your credit score.
However, it’s not just positive credit behavior that could appear on your credit report. If the primary cardholder has a history of missed payments or other negative behavior, your credit is unlikely to benefit from the account.
A card issuer must report the authorized user account to the three nationwide consumer reporting agencies in order for it to appear on your credit report. If the card issuer does not report the activity, being an authorized user will have no effect on your credit. Contact the card issuer before becoming an authorized user to confirm that they will report the authorized user account.
What Do The Credit Bureaus Say
As you might expect, the three credit bureaus decline to disclose which card issuers purchase their credit reports. Similarly, the Consumer Data Industry Association, a trade group representing credit bureaus, says it also is unable to shed light on the credit bureaus used by card issuers.
Tip: A hard inquiry lowers your credit score, albeit by a small amount. This is because it can send an uncertain signal to a potential lender. For instance, why did you apply for new credit? Are you going to max out a new credit line? This is why its important to only apply for credit when you need it.
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Getting A Copy Of Your Report
To get a copy of your credit report, youll need to contact the credit reporting bodies:
Your credit report changes over time and the CRBs will have the most up-to-date information. Youre entitled to one free copy from each CRB every year.
The Bank can only provide you a copy of the credit report we obtained at the time of your most recent application. This may not show changes in your credit report since you last applied for credit with us.
View a Sample Credit Report from CreditSmart
What Your Score Means To Lenders
- 800 900 EXCEPTIONAL
We think its important to provide our cardmembers with free access to information that will help them understand and stay on top of their credit status. Thats why were providing you with your FICO® Score and information to help you understand it.
Your FICO® Score is calculated based on data from Equifax using the FICO® Bankcard Score 8 model and is the same score we use, among other information, to manage your account. This model has a FICO® Score range from 250 through 900.
The FICO® Score Citi provides is based on information from your Equifax credit report based on the as of date included with your score. This may differ from scores you obtain elsewhere that may have been calculated at a different time using information from a different credit bureau or even a different score model. If you have additional questions regarding the FICO® Score model and how its calculated, please refer to the FICO® Score FAQ and Understanding FICO® Scores links under the Useful Links section below.
Your score wont be available if:
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How Does Equifax Calculate Your Credit Score
Equifax credit score calculation is based on your credit report data. It considers factors such as your credit history, credit utilisation, and credit mix and then uses the Equifax scoring model to calculate the credit score. Though, the exact formula used is proprietary and not available to the general public.
Here are the various factors that impact your Equifax score:
What Will You Use A Credit Card For And How Will You Repay
In terms of financial planning itâs important to think about why you need or want to get a credit card inthe first place. If youâre struggling to cover your outgoings and need a credit card to cover everydayexpenses, this may suggest trouble with overspending or with your ability to budget. Credit cards can beuseful if you have an unpredictable income or at certain times of year when you need a little extra, butcredit should not be used to regularly supplement income.
Paying off your credit card debt is something you should plan into your budget before you begin spending.Missed payments can impact your ability to get credit in the future and if you are not making regularpayments the level of debt can grow quite rapidly. It would be wise to estimate the size of your monthlyrepayments and then use a budgeting tool to calculate how affordable those payments will be.
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Do Lenders Use Fico Score Or Credit Score
Most lenders will use your FICO score instead of the credit score that you are able to access. In fact,CBC Newsfound that 90% of Canadian lenders use your FICO score, which is also known as your beacon score. FICO scores are a type of credit score, but they have special scoring formulas that lenders can use through different FICO versions.
You cant gain access to your FICO score for free online. Thats why the credit scores provided for free can be a good starting point to see where your financial health is at, but it might not necessarily be the credit score that your lender will use. FICO scores also have slightly different credit score ranges when compared to Equifax and TransUnion.
FICO Credit Score Ranges
Making The Minimum Monthly Repayment
If you missed a payment, it may be recorded as missed on your credit report. For a credit card, you need to make at least the minimum repayment to make sure your repayment history information shows that youve paid on time.
Your account statement will show when your repayment is due and when the payment you made was received by us. If the payment was received by us on or before the due date, the payment will be shown on your credit report as being paid on time.
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California Competes Tax Credit
Category: Credit 1. California Competes Tax Credit | FTB.ca.gov This credit is available for businesses that want to: Tax credit agreements are negotiated by the Governors Office of Business and Economic The California Competes Tax Credit is an income tax credit for businesses that are expanding or relocating to
Major Credit Card Issuers
*No recent Data Points on HSBC please contact me if you have any!
Summary: Credit Cards Issuers Using Equifax
Bank of Montreal, Canadian Imperial Bank of Commerce , Capital One, NBC, TD Canada Trust, Chase Canada, HomeTrust, PC Financial.
Summary: Credit Card Issuers Using TransUnion
American Express, Bank of Montreal , Capital One, MBNA, RBC, Scotiabank, Desjardins, Rogers Bank, Tangerine, TD Bank USA.
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No Creditor Uses Equifax Data Alone All The Time
A creditor never uses the same credit bureau because everything varies according to geographic location or product. In other words, the choice is up to the conditions of the moment. There is no way of knowing which credit bureau the issuer will hire in a given circumstance it may choose one or even two or take information from all three.
We must clarify that no issuer trusts only one agency to have data on a person. And when it comes to credit histories, each agency is a specialist in a certain subject. For example, if you want information regarding fraud, Equifax is the expert, but if youre going to know about educational credit scores, TransUnion is a better alternative.
Whether a creditor consults one company or the other depends solely on the questions he wants to resolve. You can choose all of them or check the Equifax data so, based on this thesis, no bank always asks a credit bureau for information.
Check Your Credit First
Too often, consumers will apply for loans or credit without even knowing their credit score or the contents of their credit reports. To leave it up to a bank or lender to approve or reject you based on information they know, but you dont, means a lack of awareness and control over your finances, at least where your credit health is concerned.
It could mean applying for a loan assuming you have good credit, but being turned down not realizing you have bad credit, now made worse because the hard credit inquiry from your bank dinged your credit score worse than it already was.
Dont wait to find out about your level of creditworthiness until after youve applied for a loan. Checking your own credit reports is the first, and most important, step to take before applying for credit. It lets you know where you stand and where to start improving your credit.The Fair Credit Reporting Act requires TransUnion, Experian and Equifax to provide you with free copies of your credit report once a year.I personally like to have my credit data readily available all the time, so downloading a credit-monitoring app is helpful because it gives you 24/7 access to your entire credit history without having to request it each time.
However, if you want your credit information straight from the source that compile it, your most official place is to obtain your report directly from TransUnion, Experian, and Equifax. Choose from three avenues:
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