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Taking Charge of Your Credit Report

Five key things to know about your credit report.

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Your credit report shows your history of paying bills and borrowing money. It's used to calculate your credit score. Banks, businesses and others look at your credit report and credit score to decide whether to hire you, lend you money or do business with you. It's a good idea to review your credit report regularly.

Here are five key things you should know about your credit report.

1. Where your credit report and credit score come from

You're a month late paying a utility bill. You max out a line of credit. You get a new loyalty card.

What do these experiences have in common? For all of them, the bank or business you're dealing with likely reports that information to a "credit reporting agency". 

There are two main credit reporting agencies in Canada, Equifax and TransUnion. They gather your credit information into a credit report. (You're entitled to a free copy of yours.) 

The agencies also use mathematical formulas to convert that credit information into a credit score. Your credit score, which is sometimes called your credit rating, can range from 300 to 900. A high score is good. It means you're seen as likely to pay your bills on time, or pay back money you've borrowed. 

2. Your credit report includes credit information

Your credit report includes your history of paying bills and borrowing and paying back money. 

The moment you get your first credit card or take out your first loan, the credit reporting agency opens a credit file on you. It adds information to your file as you do business with banks and companies. These "creditors" regularly report details about you to the credit reporting agencies. For example:

  • when you opened an account with them 
  • how much you owe 
  • whether you make your payments on time 
  • whether you miss payments 
  • what your credit limit is 
  • whether you've ever gone over your limit

This credit information appears as part of your credit report.

3. Other information that counts as "credit information"

The law in BC defines "credit information" broadly. It includes your history of paying bills and borrowing and paying back money. But it also includes:

  • your name and age
  • where you live now and where you've lived in the past
  • where you work and roughly how much you earn
  • your education and work qualifications
  • your spouse's name and age
  • whether you're married or in a common-law relationship

Any of these details can appear in your credit report.

Any information the credit reporting agencies collect from public records, such as court and marriage documents, can also be in your report. This might include:

  • an unpaid court judgment against you 
  • any court judgment against you in the last six years
  • whether you've declared bankruptcy in the last six years
  • whether you've been convicted of a crime in the last six years

4. What can't be in your credit report

Under the law in BC, some information can't be part of your credit report:

  • information about any member of your family other than your spouse 
  • your race, religious beliefs, skin colour, sexual orientation, ethnic background or politics
  • criminal convictions that have been discharged or pardoned
  • criminal charges that were withdrawn or dismissed

As well, some information can't be part of your credit report if it's more than six years old:

  • a court judgment against you (unless you still haven't paid the debt off) 
  • a criminal conviction 
  • bankruptcy (unless you've been bankrupt more than once)
  • any other negative information about you

If you spot something on your credit report that shouldn't be there, see our guidance on fixing a mistake on your credit report

5. Getting your credit score can help you understand your credit report

"I like to shop, and I was big on loyalty cards. I signed up for a lot of them, because I thought the discounts were worth it. I was shocked to find out that having so many cards led to my poor credit score. Apparently, every time I got a new loyalty card, my credit score dropped a few points." 

– Julia, Richmond

Each credit reporting agency uses a mathematical formula to turn the information they have about you into a credit score. Banks, businesses and others look at your credit score to decide whether to lend you money. Generally, someone with a credit score below 650 may have a hard time borrowing money.

Getting your credit score

Your credit score won't appear on your credit report. But (typically for an extra charge) you can order your credit score from one of the two main credit reporting agencies:

There are also options for getting your credit score for free.

How knowing your credit score can help

Getting your credit score can help you learn what to pay attention to on your credit report. 

The credit reporting agencies are secretive about how they calculate credit scores. Among the factors that they look at are:

  • your payment history 
  • the balances on your credit accounts
  • how old your accounts are 
  • your mix of accounts 
  • how often you apply for credit

Many lenders use their own methods to calculate your credit score. As a result, your credit score might be slightly different depending on the credit reporting agency or lender providing the score.

For more on how credit scores work, see our guidance on improving your credit score.

A sudden large drop in your credit score may be caused by an error in your credit report. Or it may be a sign of fraud. When you review your credit report, keep an eye out for anything you can't explain. See our guidance on fixing a mistake on your credit report.

Learn more about credit reports, including how you can improve your credit score.

Your Options for Cellphone Service

Options for choosing your cellphone service.

Heather“I signed a cellphone contract to get a good price on a new iPhone. When my two-year contract expired, I continued month-to-month. My monthly payment stayed the same. A friend pointed out that as I had now paid off the cost of the phone, I was effectively paying more than if I’d bought the phone upfront.”   

– Heather, Vancouver

Choosing a cellphone can be a complicated process. Two-year contract or pay-as-you-go? Smartphone or basic flip phone? Individual or shared plan? With so many options and new words to learn, it can be hard to decide what to buy.

When you get a cellphone, you are buying two things: the phone handset and the cellphone service. The handset is the physical device. The service is what allows you to use the phone.

In buying cellphone service, most people sign a service contract with a phone provider. But it's not your only option. And it’s rarely your cheapest option.

Option 1: The cellphone contract

You can walk into a store and buy a laptop or a TV, and you don't have to sign a contract with an internet provider or a cable company. Yet it's different with a cellphone. The majority of people buying a cellphone sign a two-year contract with a service provider, typically in exchange for a "free" or discounted phone handset.

A service contract with a phone provider is called a "postpaid service contract" in the Wireless Code, Canada's main set of rules for cellphone service providers.

In the contract, you agree to pay a minimum payment each month for the term of the contract, typically two years. Your payment covers a set amount of calls, texts and (optionally) data. If you go over the set amounts, you have to pay extra. If you end the contract early, you have to pay cancellation charges.

In signing a cellphone contract, the Wireless Code offers you several legal protections.  

Signing a service contract with a phone provider can be a way to get the service plan or the phone that you want at a low upfront price. But it often costs more over the long run. Your "free" phone is not actually free—the cost is typically built into the contract payments so that you're effectively paying off the full cost of the phone over the length of the contract.

Option 2: Prepaid services

"Prepaid services" are cellphone services bought in advance of use—for example, a prepaid card or a pay-as-you-go service.

With prepaid services, you put money (called credit) onto an account. Every time you make a call, send a text or use the internet on your phone, the cost is taken out of your prepaid account balance. When your balance runs out, you buy more credit, "topping up" your account.

Prepaid services are typically less expensive than postpaid service contracts. You pay for only what you use. There's no risk of "bill shock"—getting a bill that is much higher than expected. On the flip side, you have fewer protections when you get a prepaid service.

Some prepaid phone plans look and work a lot like postpaid service plans. The test for whether a cellphone plan is considered a prepaid service or a postpaid service under the Wireless Code is: Can the service provider bill you for some or all charges after use, or can you incur overage charges beyond the prepaid balance? If the answer is yes, the plan is a postpaid service plan.

Option 3: Month-to-month service plans

Almost every phone provider offers month-to-month cellphone service plans. With these plans you pay a monthly rate for a set amount of calls, texts and (optionally) data, but you are not required to commit to a long-term service contract. These plans generally require you to provide or purchase your own phone.

Many providers also offer the month-to-month option to customers once their initial cellphone contract runs out.

Pros and cons of the options

Here are key differences between the three options for cellphone service: a "prepaid plan", a “postpaid service contract”, and a month-to-month service plan.

Topic Prepaid Postpaid Month-to-Month
Phone Need to have a phone or pay for one Low upfront price to get phone or service plan you want Need to have a phone or pay for one
Costs
+
Risk
Costs per minute can be higher
+
No risk of bill shock
Minimum monthly charges
+
Risk of bill shock for unexpected charges
Minimum monthly charges
+
Risk of bill shock for unexpected charges
Protections

Fewer protections under the Wireless Code

More protections under the Wireless Code

Fewer protections under the Wireless Code

Usage Must top up your account on time; if you run out of credit, you can’t use the phone No credit required to make use of phone No credit required to make use of phone
Cancellation Not locked into a contract term

Locked in for contract term, unless you pay a cancellation fee

Not locked into a contract term

 

Learn more about what you should know when signing a cellphone contract or getting prepaid cellphone services. Also check out our guidance on negotiating with a cellphone provider.

The Cellphone Contract: Before You Sign

Seven things you should know before you sign a cellphone contract.

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You've considered your options for getting a cellphone, and decided on a service contract with a phone provider. This is called a "postpaid service contract", as you are billed all or in part after use, for example in a monthly bill.

Here are seven things you should know when signing a cellphone contract.

1. You don’t have to sign a piece of paper to "sign the contract"

A cellphone contract is the official record of your agreement with a phone service provider. It says what you and the provider agree to do and not do.

You don’t have to actually sign a piece of paper to "sign the contract". You can agree to a contract with the cellphone provider by:  

  • clicking a link that says you agree to the terms and conditions
  • saying you agree to the terms and conditions over the phone

2. The contract must be clear and easy to understand

Cellphone contracts are "standard-form" contracts. This means that the service provider has prepared it, and typically will resist negotiating or changing any part of it. It's still important to read and understand the contract so you know what you are committing to.

Under the national Wireless Code, a mandatory code of conduct for cellphone service providers, your contract and related documents must be in plain language. They must be written in a way that is clear and easy for you to read and understand. Related documents can include any "Fair Use Policy" and privacy policy.

The prices set out in the contract must be clear and must indicate whether they include tax.

If you find it difficult to understand the contract or need more information, ask the salesperson to explain the contract to you.

3. The contract must include certain information

"When I signed my cellphone contract, the salesperson told me my plan had 'unlimited calling'. But a month into my contract I got a text message saying that my voice service would be suspended. I'd reached the calling limits for the month in the provider's 'Fair Use Policy'. My contract didn't say anything about this. When I complained to the provider, they backed off. They agreed that my contract didn't include anything about limits on my services."

– Virginia

The contract must clearly describe the services you will receive, and include information on when and why you may be charged extra.

Under the Wireless Code, the contract must clearly set out the "key contract terms and conditions", which are:

  • the voice, text and data services included in the contract
  • any limits on the use of those services that could trigger overage charges or additional fees
  • the minimum monthly charge for services included in the contract
  • the length of the commitment period, including the end date of the contract
  • any early cancellation fees, how much they decrease each month, and when a cancellation fee no longer applies
  • if you received a free or discounted phone on signing the contract, the retail price of the phone and the amount you paid for the phone

If the contract doesn't set out the key terms and conditions that you agreed to, you can cancel the contract without paying a cancellation fee or any other penalty. You have 30 days after receiving a copy of the contract to cancel it.

The Wireless Code makes it clear that data services are a "key term and condition" of your cellphone contract. The service provider cannot change a key term or condition of your contract without your consent. 

As well, the contract must clearly set out:

  • the trial period for the contract, including any limits on use during the trial period
  • whether upgrading the device or amending a contract term will extend your commitment period or change any other aspect of the contract
  • whether the contract will be extended automatically on a month-to-month basis when it expires
  • where you can find information about the service provider's coverage area, tools to manage your bills, how to make a complaint, and the Wireless Code

4. The provider must give you a copy of the contract

When you agree to the cellphone contract, the service provider must give you a permanent copy of the contract and related documents. They must give you a copy of these documents in the format of your choosing (electronic or paper), at no charge. 

If you agree to the contract in person, the service provider must give you the contract and related documents immediately.

If you agree to the contract on the phone or online, the provider must send you the contract and related documents within one business day if you opt for electronic format. 

If you opt to receive a paper copy of the contract, the provider must send you a copy of the contract and related documents within 15 days. 

You have the right to choose the format you want to receive the contract in, paper or electronic. The provider cannot force you to accept a particular format. For example, a provider's contract can't say that by signing the contract, you agree to receive the contract in electronic format. 

If the provider doesn't provide the contract within the required time frame, you can cancel the contract without paying a cancellation fee or any other penalty. You have 30 days after receiving a copy of the contract to cancel it.

The service provider must also provide you with a permanent copy of the contract in the format of your choosing (electronic or paper) upon request at no charge, at any time during the term of the contract.

5. The provider must give you a summary of the contract

When the provider gives you your contract, they must also provide a "Critical Information Summary" which summarizes the most important elements of your contract. 

The summary must be clear and concise (not over two pages), in plain language, and in an easily readable font.

It must include:  

  • all key terms and conditions of the contract—the services included in the contract, any limits on those services, the minimum monthly charge for services, the length of the commitment period, any early cancellation fees, and (if you received a subsidized phone) the retail price and the amount you paid for the phone
  • any limits on "unlimited" services
  • the total monthly charge, including rates for optional services you selected
  • information about the trial period, including any limits on use during the trial period
  • information on how to make a complaint

The Critical Information Summary is intended to summarize the contract, not replace it. The summary may be provided as a separate document from the written contract or prominently as the first pages of the written contract.

6. Any phone you get must be unlocked

Any phone provided to you by a service provider must be provided unlocked. (When a phone is locked to a network, it can only work with that provider's voice, text and data services.)

A provider can't charge you to unlock a phone.

7. You can cancel the contract during the 15-day trial period

After signing a cellphone contract, you have a 15-day "trial period" to see whether the service meets your needs. During this period, you're legally entitled to cancel the contract—for any reason—without having to pay any penalty or early cancellation fee. Under the national Wireless Code, this trial period applies to all cellphone services, whether you buy them on a stand-alone basis or as part of a bundle, and whether you buy in person, online, or over the phone. 

To cancel the contract during the trial period, you can't have used more than half of your monthly usage limits. You must return the device in near-new condition, including the original packaging.

For persons with disabilities, the trial period is 30 days, and the usage limits are doubled.

The trial period starts on the date on which your service begins. If you decide to cancel your contract, contact the provider while you're still in the trial period, and say you want to cancel the contract. It's best to follow-up in writing. 

For more on cellphones, see our guidance on negotiating with a cellphone provider.  

Prepaid Cellphone Service: Your Rights

Five things to know about prepaid cellphone service.

"I heard that a prepaid plan can be cheaper than signing a cellphone contract. So I got a prepaid plan and put $100 on my account. After the second month, I got a bill for $150. The provider said that I'd used more minutes than were covered by my prepaid balance, and so they charged me for it afterwards. I later learned that this wasn't truly a prepaid plan."   

– Li, Courtenay

"Prepaid services" are cellphone services bought in advance of use—for example, a prepaid card or a pay-as-you-go service. You put money (called credit) onto an account. Every time you use the phone, the cost is taken out of your prepaid account balance. When your balance runs out, you buy more credit, "topping up" your account.

Prepaid services are typically less expensive than "postpaid service contracts" (where you are billed all or in part after use). With a prepaid plan, you pay for only what you use. There's no risk of "bill shock"—getting a bill that is much higher than expected. 

On the other hand, you have fewer protections with a prepaid plan than you do when you sign a postpaid service contract.

Here are five things you should know when getting prepaid cellphone service.

1. Be clear on whether your plan is truly a prepaid service

Some prepaid plans look and work a lot like postpaid service plans. For example, in some "pay-in-advance" plans, a customer can use up all their prepaid balance and continue to use the service. The provider then includes overage charges on the customer's next bill. This can lead to bill shock, where the bill is much higher than expected. Plans like this are treated as postpaid service plans under the Wireless Code, Canada's main set of rules for cellphone service providers. 

The test for whether a cellphone plan is considered a prepaid service or a postpaid service under the Wireless Code is: Can the service provider bill you for some or all charges after use, or can you incur overage charges beyond the prepaid balance? 

If the answer is yes, the plan is a postpaid service plan. In which case you have additional protections under the law

2. The provider must clearly explain the plan

"I got a prepaid phone plan. A week later another provider offered me a good deal on a two-year contract. I signed up, and ported over my prepaid number. I asked for a refund of the unused portion of my prepaid account balance. The provider said no. They said that customers who port to another provider are not entitled to refunds. I complained, as the provider hadn't told me about that condition, as they should have."  

– Melissa, Surrey

For prepaid services, the Wireless Code does not require service providers to provide you with a written contract. But the service provider must communicate with you in a way that is clear and accurate. They must use plain language. 

The provider must inform you of all conditions and fees that apply to your prepaid balance.

The provider must explain how you can:

  • check your usage balance
  • contact the provider's customer service department
  • complain about the service

If a phone is provided as part of the prepaid service, the provider must also inform you of:

  • any early cancellation fees, how much they decrease each month, and when a cancellation fee no longer applies
  • the retail price of the phone and the amount you paid for the phone
  • where you can find information about device upgrades and the manufacturer’s warranty   

If the service provider gives you a written contract for prepaid services, the contract must be clear and easy for you to read and understand.

3. Any phone you get must be unlocked

Any phone provided to you by a service provider must be provided unlocked. (When a phone is locked to a network, it can only work with that provider's voice, text and data services.)

A provider can't charge you to unlock a phone.

4. When the term of your prepaid plan expires, you have a grace period of seven days to "top up" your account

Your prepaid plan will typically have a term, also called the "commitment period". When the term expires, the provider must give you at least seven days to "top up" your account, at no charge, in order to keep the account active. 

This grace period applies whether the term is established via a prepaid card or by contributing to a prepaid account balance.

5. You can cancel the plan during the 15-day trial period

If your prepaid plan is subject to an early cancellation fee, you have a 15-day "trial period" to see whether the service meets your needs. During this period, you can cancel the contract—for any reason—without having to pay any penalty or early cancellation fee. 

To cancel the contract during the trial period, you can't have used more than half of your monthly usage limits. You must return the device in near-new condition, including the original packaging.

For persons with disabilities, the trial period is 30 days, and the usage limits are doubled.

The trial period starts on the date on which your service begins. If you decide to cancel your contract, contact the provider while you're still in the trial period, and say you want to cancel the contract. It's best to follow-up in writing. 

For more on cellphones, see our guidance on negotiating with a cellphone provider.

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