6 Steps to Clean Up Your Credit Report

Your credit report is one of the most important financial documents in your life.

It includes all of the ingredients that determine your credit score. Both your credit score and credit report are reviewed in various lending decisions thus, it’s key to keep your credit report in good shape.

Here are 6 steps for cleaning up your credit report.

1. Access your free credit report

First, you need to access your free credit report. You can get this from one of the credit bureaus: Equifax Canada or TransUnion Canada.

You’ll need to provide two forms of identification and follow specific instructions to retrieve your credit report via mail, phone, in-person, or online.

It may take up to 10 days to get your free credit report and once you have it, keep it handy for the following steps.

2. Learn how to read your credit report

When looking at your credit report, you’ll see unfamiliar letters and numbers but to understand your report, you have to know what they mean.

Here’s a quick guide on the letters and numbers.

So, if you see the code M1, it means that you pay your mortgage on time.

3. Review your information carefully

Next, you must review your credit report to ensure everything is correct and updated.

Comb through your personal and financial information, make sure that the codes and details are all accurate, and simply make sure there aren’t any mistakes.

4. Check for mistakes

When reviewing your credit report, take the time to specifically look for mistakes.

As long as your credit card amount is within a range that looks accurate, you’re probably in good shape. But if your loan amounts look wildly different, there’s likely a mistake on your credit report.

Therefore, it’s important to carefully review your credit report and ensure all the information is correct. If you notice any mistakes, write them down so that you can dispute them.

5. Dispute any errors right away

If you’ve spotted an error, acting fast and disputing immediately is crucial, especially if you plan on applying for a credit card or mortgage. Errors can cause adverse effects, leading to higher interest rates.

If you do see a mistake, here’s what to do:

• Gather information to support your claim (credit card statements, loan information, etc.)
• Contact both of the credit bureaus – Equifax Canada and TransUnion Canada.
• Wait for the credit bureaus to investigate and contact lenders to clarify whether or not there’s a mistake

6. Follow up and review your credit report again

You may want to follow-up with the investigation or submit additional information – feel free to do so!

If the error is proven, your credit report will be updated. You should then make a habit of annually checking your credit report and before applying for a loan.

Final word

Your credit report is not something that should be ignored. With these steps, you can easily clean up and maintain a healthy credit report and credit score.