Credit in a New Country
A Guide to Credit in Canada
Human Rights Act
The Canadian Human Rights Act was originally drafted in 1976 and is regularly updated and revised. This act regulates how creditors lend money to customers. It prohibits any form of discrimination from being employed when making credit decisions. This is not just limited to approving an application for credit, but also includes credit line increases, decreases, interest rate changes and any other judgmental decision made on your account.
Types of accounts typically included in a credit report include:
- Credit cards
- Department store cards
- Gas company cards
- Bank loans
- Auto loans and auto leases
- Recreational vehicle loans
- Mortgages
- Consumer finance company accounts
- Credit union credit cards or loans
Types of accounts that traditionally do not appear on a standard credit report:
- Rent payments
- Rent-to-own accounts
- Payday loans or loans from cheque cashing outlets
- Chequing account information
- Interac cards
Some creditors will only report your account if you are late on your payments, but not if you pay on time. Cellular phone companies are a good example of this. They generally only report accounts that have not been paid and have been turned over to collection agencies. Since companies are not required to report information to credit reporting agencies, not all do. Some will report to one or more major credit reporting agencies, but not all of them.
When you are establishing credit, your goal should be to get accounts that will be reported each month to all of the major credit bureaus. Be sure to pay each bill on time or you may risk a late payment on your credit report. Late payments stay on your report for six to ten years and make it more difficult to get credit at good rates and terms.
