MasterCard launches second annual Credit Report Week, encouraging Canadians to check their credit report
Credit Cards Today, a comprehensive guide to credit cards, also available
TORONTO (September 20th, 2004) – Today marks the launch of the second annual MasterCard Canada Credit Report Week, encouraging Canadians to check their personal credit report at least once a year. A person’s credit history and credit rating 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, nearly two thirds (63 per cent) of Canadians have never checked their personal credit report, and nearly a quarter (23 per cent) don’t know what a credit rating is. In addition, more than one in 10 of Canadians (12 per cent) have been denied a loan, mortgage or some other kind of credit because of a poor credit rating.
"Checking your credit report is as important as checking the oil in your car," said Kevin Stanton, President of MasterCard Canada. "Just as no one wants to be stranded at the side of the road when they need to get somewhere in a hurry, no one wants to be denied credit when they need it most."
As part of its efforts to help educate Canadian consumers about the wise use of credit, beginning today, MasterCard Canada is offering TransUnion Canada online credit reports at no charge to the first 10,000 people. Consumers can access their free credit report at www.mastercard.com/personal/en/education/credit. While basic credit reports are always available for free by mail or in-person from Canada’s credit reporting bureaus, the online version of TransUnion's reports, which are available at www.tuc.ca, normally cost $14.99. Under Canadian law, Canadians are entitled to see the information a credit agency has about them.
"Your credit report is critical," added Stanton. "It's what lenders base their decisions on for mortgages, lines of credit, even apartments. We hope Credit Report Week will encourage Canadians to check their credit report, and gain a greater understanding of what impacts their overall credit picture."
The MasterCard research also showed that while the vast majority of Canadians (86 per cent) describe themselves as either excellent, very good or good money managers, just a quarter (25 per cent) manage to save more than 10 per cent of their take home pay each month.
In addition to complimentary credit reports, MasterCard Canada is also launching Credit Cards Today. This 16-page guide explains in plain language how credit cards work and covers everything from the mechanics of interest, annual fees, reward programs and point systems, to the process among banks, issuers and merchants. Credit Cards Today is designed to help consumers evaluate and select the kind of credit card that is best for them, as well as educate them about how credit card usage affects their larger credit picture. The guide will even allow Canadians to discover their own credit card personalities. Credit Cards Today is available as a downloadable PDF file at www.mastercard.com/personal/en/education/credit.
Credit Report Week is a consumer education program designed to raise awareness and understanding of how personal credit histories are generated and how they impact Canadians' financial health. 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, TransUnion Canada (www.tuc.ca) or Equifax Canada (www.equifax.ca), and ask them to correct any errors.
"Understanding and knowing your credit standing is the first step to financial health and independence," added Ken Porter, President, TransUnion Canada. "TransUnion is pleased to be working with MasterCard Canada to encourage Canadians to check their credit report and to educate them on developing and maintaining healthy credit."
MasterCard Canada Survey of Canadians’ credit rating knowledge and behavior
Nearly two thirds have never checked their credit report
- Nationally, the MasterCard Canada survey of 2,000 Canadians shows that nearly two thirds (63 per cent) of Canadians have never checked their personal credit report;
- Alberta has the highest percentage with 40 per cent who have checked their credit report;
- Only a small percent (22 per cent) of young Canadians (18 - 24 years) have checked their credit report.
Many don’t know what a credit rating is
- Nearly a quarter of adult Canadians (23 per cent) do not know what a credit rating is;
- 49 per cent of young people (18 - 24 years) do not know;
- People in lower incomes (under $40,000 annual household) are least likely to know: 34 per cent said they do not know, vs. 10 per cent in the highest income bracket ($100,000+).
Just one in five have checked their report in the last year
- Of the 36 per cent of Canadians who have ever checked their credit report, just over half (56 per cent) have checked it within the last year. So in total, just 20 per cent of Canadians checked their credit report in the last year.
Credit Denial is common
- More than one in 10 adult Canadians (12 per cent) have been denied a loan, mortgage or some other kind of credit because of a poor credit rating;
- Manitoba and Saskatchewan have the highest levels of denial, at 16 per cent; Quebec has the lowest at 9 per cent;
- Canadians ages 35 to 44 were the most likely to be turned down, at 19 per cent. Older Canadians (55 +) were least likely to be turned down at 5 per cent;
- Men were more likely to be denied credit than women (15 per cent and 10 per cent respectively).
A nation of Survivors, Scrimpers and Savers, not so many Spenders
- More than a third of Canadians (34 per cent) describe themselves as "Survivors": they have just enough money to pay all their bills each month;
- Nearly one in three Canadians (29 per cent) describe themselves as "Scrimpers": they pay all their bills each month, and in addition, save up to 10 per cent of their take home pay;
- A quarter of Canadians (25 per cent) describe themselves as "Savers": they pay all their bills each month and save more than 10 per cent of their take home pay;
- Just seven per cent of Canadians described themselves as "Spenders": some months, they have trouble paying all their bills.
Canadians may be overconfident about their credit
- 38 per cent of respondents think they have an "excellent" credit rating;
- 19 per cent think they have a "very good" rating;
- 22 per cent think they have a "good" rating;
- So, nearly eight in 10 Canadians (79 per cent) are confident about the quality of their credit rating;
- Older Canadians (55+) have the most positive assessment of their own credit rating: 51 per cent think they have an excellent rating, whereas just 21 per cent of young people (18 – 24) think they have an excellent rating;
- Only 15 per cent of all respondents think their credit rating is "fair" or "poor".
Proficient personal financial management
- 20 per cent of respondents think their ability to manage money is "excellent";
- 31 per cent think their ability to manage money is "very good";
- 35 per cent think their ability to manage money is "good";
- So the vast majority of Canadians (86 per cent) are confident about their money management skills;
- Only 13 per cent of all respondents think their money management skills are "fair" or "poor".
The MasterCard Canada survey, conducted by Decima Research, was based on interviews conducted between August 11th and August 22, 2004. Results from the national sample of 2,017 Canadians 18 years of age or older are accurate within plus or minus 2.2 percentage points, 19 times out of 20.
TransUnion is a leading global information solutions company that customers trust as a business intelligence partner and commerce facilitator. TransUnion offers a broad range of financial products and services that enable customers to manage risk and capitalize on market opportunities. The company uses leading-edge technology coupled with extensive analytical capabilities to combat fraud and facilitate credit transactions between businesses and consumers across multiple markets. Founded in 1968, Chicago-based TransUnion employs 4,100 associates that support clients in 24 countries. Visit our international Web site at www.transunion.com, and our Canadian Web site at www.transunion.ca.
About MasterCard International
MasterCard International is a leading global payments solutions company that provides a broad variety of innovative services in support of our global members’ credit, deposit access, electronic cash, business-to-business and related payment programs. MasterCard International manages a family of well-known, widely accepted payment cards brands including MasterCard®, Maestro® and Cirrus® and serves financial institutions, consumers and businesses in over 210 countries and territories. The MasterCard award-winning Priceless® advertising campaign is now seen in 96 countries and in 47 languages, giving the MasterCard brand a truly global reach and scope. For more information go to www.mastercardinternational.com>
Matt Cram, Environics Communications