Financial Literacy – Credit Bureau Reports and Monitoring Services

 

So, it’s financial literacy month, and I’m watching different folks weigh in on Twitter and Linkedin.  An interesting topic that comes up is credit reports.
 
I’ve mentioned this in the past, and I will mention it again – you should pull a copy of your credit bureau at least once a year, to make sure you don’t have any errors on it or things you weren’t aware of.  Better to know about an outstanding collection or judgment now than when you go to buy a car, for example.  And certainly you want to watch for identity theft or items opened in your name you weren’t aware of, or joint debts that you have signed as a guarantor that aren’t being paid by the other person.  Unsecured debts over 6 years old (7 if they are a  judgment) should also not appear on your bureau.


Get A Copy Of Your Credit Report Regularly!

You can request a copy from both credit bureaus, Equifax and Trans Union, through these links:
 
https://www.transunion.ca/resources/transunion-ca/doc/personal/Consumer_Disclosure_Request_Form_en.pdf
 
http://www.equifax.com/ecm/canada/EFXCreditReportRequestForm.pdf
 
And if there’s something wrong with your credit report, you can file a dispute at these links below.  The bureaus are required to investigate the item and either remove it or get definitive proof the debt is valid on your behalf.
 
And of course, if you dispute something, pull your credit bureau again in 3 months to see if it was removed or not.
 
http://www.transunion.ca/ca/personal/creditdisputes_en.page  
 
Dispute Equifax Credit Report | Equifax Canada
 
Now we come to the issue of credit monitoring services, like Credit Karma and Borrowell.  Some pundits say they are bad – I think they are good for a few reasons, but with some caveats.
 
 
When You Should Sign Up For Credit Monitoring
 
If you want easy consistent access to your Trans Union bureau (through Credit Karma) and Equifax bureau (through Borrowell) then it’s a great option to have an app on your phone to see it, or get email alerts whenever something drastic like a new collection item appears on your bureau.
 
I can tell you, from a collection agency perspective, when we upload a new batch of collection items to the bureau, after not being able to reach a consumer, we get flooded with calls because their phone alerted them – and in some cases, the debt isn’t valid, we confirm it with the creditor, and remove it, all in a matter of days before it’s wrongly holding someone up from a mortgage or car lease.
 
In other cases, the alert causes the consumer to call in, as they were unaware of the debt, resolve it, and again solve it in a matter of days without putting the consumer in a tight deadline situation or have the embarrassment of being denied credit.
 
But some folks still say Credit Karma and Borrowell are bad – and in some cases, they are right.
 
 
When Your Shouldn’t Sign Up For Credit Monitoring
 
When you sign up for Credit Karma or Borrowell, it’s free – why would they do that?  Well, because you are the product.  They will try to sell you credit products through their platforms, and they make a referral fee if you sign up.  As well, they may directly lend to you, again making money.  Just like Facebook, you are monetized and advertised to.
 
If you are going to sign up for every credit product advertised to you, not picking and choosing what credit products are right for you, and only getting as much credit as you reasonably need don’t sign up.
 
If you are going to stress over your credit score (which is abstract and will change over time as the formulas are tweaked by the bureaus or as things age or hit certain thressholds), don’t sign up.
 
If you would rather get a completely accurate and up to date bureau, get it from the bureaus.  These monitoring services use API interfaces with the bureaus and they may be slightly out of date or not grab your data properly.  If you need an official bureau report for whatever reason, don’t sign up.
 
 
Conclusion
 
I am biased here, I personally signed up for Borrowell and Credit Karma and used it to shop for my mortgage.  I’ve encouraged my just-adult children  to sign up for Borrowell to get their first credit card and establish their credit rating.  I own a collection agency and a number of consumers pay their accounts to our clients because of these credit monitoring services – so I see the good in them.
 
But as always, during Financial Literacy Month, it’s all about education – learn what options you have, and make the best educated decisions you can make for your personal credit situation.  Everyone’s circumstances are different, and everyone’s opinions are different.
 
If you have questions about financial literacy or want to ask questions about credit and collections, happy to share what I know.  Drop me a line at blair@receivableaccounts.com, or better yet, join us for a Financial Literacy AMA Google Meet on Tuesday November 23 at 6pm –
 
Financial Literacy Month AMA
Tuesday, November 23 · 6:00 – 7:00pm
Google Meet joining info
Video call link: https://meet.google.com/xhm-tora-kma
Or dial: ‪(CA) +1 289-948-7791 PIN: ‪527 202 384#
 
Thanks kindly,
 
Blair DeMarco-Wettlaufer
KINGSTON Data & Credit
Cambridge, ON
226-946-1730
blair@receivableaccounts.com