Credit Report Week
Encouraging Canadians to Understand their Credit Information
TORONTO (September 8th, 2003) – This week, Canadians are being encouraged to start a new annual tradition – checking their personal credit report. An individual's credit history has a major impact on their ability to rent or buy a home, and secure loans and credit. Yet according to research collected by MasterCard Canada, more than a quarter (27 per cent) of Canadians don’t know what a credit rating is and less than a third (31 per cent) have ever checked their personal credit report.
As part of its efforts to help educate Canadian consumers about the wise use of credit, MasterCard Canada today launched Credit Report Week, a consumer education program designed to raise awareness and understanding of how personal credit histories are generated and how they impact Canadians' financial health.
As part of Credit Report Week, MasterCard Canada is offering consumers a $14.50 Equifax Credit Report™ at no charge in conjunction with using MasterCard's new Credit Wise education module found at www.mastercard.ca. The new Be Credit Wise module helps Canadians understand how to manage their credit effectively and allows them to order and review their own personal credit reports. MasterCard is making 10,000 credit reports available through the Equifax link at www.mastercard.ca/creditwise at no charge between 8:00 a.m. Monday, September 8th and midnight Sunday September 14th. Visit www.mastercard.ca for details.
“It’s surprising how few Canadians have seen their credit report,” said Walt Macnee, President of MasterCard Canada. “A credit report is the snapshot lenders look at to assess a person as a credit risk. It’s how lenders decide whether to give you a mortgage, a car loan, even an apartment, so it’s critical consumers become familiar with their credit history.”
MasterCard Canada recommends Canadians check their credit report once a year, to track new information that has been added and to ensure that all entries are correct. Canadians can contact either of the two major credit bureaus, Equifax Canada (www.equifax.ca) or TransUnion Canada (www.tuc.ca), and ask them to correct any errors.
“The end of summer is a good time to do a financial check-up each year, starting with your credit report,” added Macnee. “By offering complimentary credit reports online, we hope to encourage Canadians to check their credit reports regularly, and gain a better understanding of what affects their overall credit health.”
Under Canadian law, Canadians are entitled to see the information a credit agency has about them. Basic credit reports are available free by mail or in-person from both credit agencies. Online credit reports, however, are available for a fee. For example, Equifax Canada's online report costs $14.50. But from September 8th to September 14th, MasterCard is providing complimentary Equifax online reports to the first 10,000 people to order them through the Equifax link at the Be Credit Wise credit education center at www.mastercard.ca.
“Our goal is to empower consumers by providing them direct and immediate access to their comprehensive credit history online,” explained Rick Cleary, President, Equifax Canada. “Your credit report is an integral part of how you are viewed as a risk by creditors, so Equifax is pleased to help MasterCard Canada educate Canadians on what information impacts their overall credit health.”
In addition to educating consumers about their personal credit report, the new MasterCard Be Credit Wise site includes information on building and maintaining a solid credit history, as well as general information on wise use of credit such as minimizing carrying costs, reduction of debt and more.
“MasterCard Canada remains committed to helping Canadians be credit wise,” added Macnee. “Credit is an effective and helpful financial management tool, but it needs to be used wisely. The Be Credit Wise site is a dynamic, interactive tool that will show Canadians how they can build a solid credit history and better manage their personal finances.”
To take advantage of the many valuable benefits MasterCard is offering during Credit Education Week, consumers simply need to visit www.mastercard.ca and click on the Be Credit Wise link.
Be Credit Wise Tips
MasterCard's Be Credit Wise site includes important information and tips on establishing and maintaining good credit including:
- Pay bills promptly and always meet payment due dates. A bill paid late may be reported to credit bureaus and become part of your credit report.
- Keep your total amount of available credit (such as credit cards, lines of credit, second mortgages, etc.) at a reasonable level and don't apply for unnecessary credit. Too much available credit can discourage lenders.
- Draw up a budget that accounts for monthly bills. Pay off debts on schedule or ahead of schedule.
- Check your credit report annually to determine how your credit habits have impacted your report.
MasterCard Canada Survey of
Canadians credit rating knowledge and behavior
Less than a third have ever checked their credit report
- Nationally, MasterCard Canada’s survey of 2,000 Canadians shows that less than one third (31%) of Canadians have ever checked their credit report;
- Alberta has the highest percentage with 39% who have checked; Atlantic Canada has the lowest, with just 27% saying they checked their credit report.
- Only a small percent (18%) of young Canadians (18–24 years) have checked their credit report.
Many don’t know what a credit rating is
- More than one quarter of adult Canadians do NOT know what a credit rating is: 27% of all respondents say they do NOT; 73% say they do;
- Quebec has the highest percentage of respondents – 44% – who do NOT know; Manitoba/Saskatchewan has the lowest – 15% do NOT know;
- 57% of young people (18–24 years) do NOT know;
- People in lower incomes ($40,000–$60,000 annual household) are least likely to know: 23% said they do not vs. 11% in the highest income bracket ($100,000 +).
Less than one in five have checked their report in the last year
- Of the 31% of Canadians who have checked their credit report, 57% checked within the last year. So in total, approximately 18% of Canadians have checked their credit report in the last year.
Canadians may be overconfident about their credit
- 38% of respondents think they have an “excellent” credit rating;
- 20% think they have a “very good” rating;
- So, 58%, or nearly six in 10 Canadians are very confident about the quality of their credit rating;
- Ontarians have the most positive assessment of their own credit rating: 62% think it's very good or excellent;
- Alberta has the lowest percentage who think it's good or excellent (53%);
- Only 11% of all respondents think their credit rating is “fair” or “poor.”
Canadians don’t understand the full picture of what affects their credit rating
- A variety of factors affect a person’s credit rating. But when asked what has the biggest impact on a credit rating, nearly six in ten Canadians (59%) say “paying off credit card balances” has the biggest impact on their credit rating; Quebecers are slightly higher than average (64%);
- By contrast, only 9% say the number of credit cards owned, demonstrating that it is not well-understood that credit ratings are influenced by the amount of credit available as well as the person's performance in paying down debt;
- 17% picked “having a mortgage”;
- 8% picked “having a line of credit”;
- 6% don't know.
The MasterCard Canada survey, conducted by Decima Research, was based on interviews conducted between July 10 and July 20, 2003. Results from the national sample of 2,000 Canadians 18 years of age or older is accurate within plus or minus 2.2 percentage points, 19 times out of 20.
About MasterCard International
MasterCard International has a comprehensive portfolio of well-known, widely accepted payment brands including MasterCard, Cirrus and Maestro. With approximately 25,000 MasterCard, Cirrus® and Maestro® members worldwide, MasterCard serves consumers and businesses, both large and small, in 210 countries and territories. MasterCard is a leader in quality and innovation, offering a wide range of payment solutions in the virtual and traditional worlds. The MasterCard award-winning Priceless™ advertising campaign is now seen in 96 countries and in 45 languages, giving the MasterCard brand a truly global reach and scope. For the quarter ended March 31, 2003, gross dollar volume exceeded US$285.7 billion. MasterCard can be reached through its website at www.mastercardinternational.com.
Tina Gladstone/Matthew Cram
Environics Communications for MasterCard Canada, 416-920-9000