Credit reports for entrepreneurs
3-minute read
One of the first things any lender will look at to determine whether or not to grant you a business loan is your personal credit report.
The higher your credit score, the better your chances of getting a business loan, although other criteria, such as your business plan, your financial statement and projections, and the type of collateral you offer are just as important.
Make sure you have this information on hand before meeting with your banker to improve your chances of getting the financing you need. A good credit score will also help you qualify for a loan at a lower interest rate.
How do credit reports help?
It is important to regularly check your personal credit report to:
- take the necessary steps to improve your credit score
- verify the accuracy of the information
- recognize signs of identity theft
- ensure it no longer lists debts that you’ve already paid
- promptly request corrections should you find any errors
- negotiate better terms with vendors or insurers
What kind of information does a credit report contain?
A credit report may include:
- your personal identification information
- your credit score
- your banking information and authorized limits
- a list of your credit cards, lines of credit and loans
- mortgage information
- your credit history
- your loan repayment history
- credit inquiries from lenders
- total debt
- debt sent to collection agencies
- consumer statements
- fraud alerts
- public records such as judgments, bankruptcy and insolvencies
- recommendations from the credit bureau
Keep in mind that credit bureaus collect and report information differently, so reports from different agencies will vary. Consider asking more than one provider for your credit report.
Free and low cost credit reports
If you need to obtain your credit report for free or a relatively small fee, consider the following providers. Most banks also offer this information to their clients for free. It’s worth asking for.
Borrowell gives you free access to your Equifax credit score and report and shares personalized tips to help you improve your credit health. Proudly Canadian, Borrowell uses your credit profile to suggest financial products such as credit cards, mortgages and loans, and receives a small referral fee each time you buy one of them.
Credit Karma by Intuit shows your score and credit information from TransUnion. It may be slightly different from your Equifax credit score because credit bureaus get their information from different sources. Credit Karma is able to provide this service for free because it uses the information you provide when you sign up to show you personalized ads from partners and advertisers.
Equifax Canada is one of the two major credit bureaus in Canada that allows you to access your personal credit report at no charge. You can download it with a myEquifax account or request it by phone, mail or in person. This free report, however, does not include your Equifax credit score, which you can access through their optional paid service. Quebec residents have the right to place a lock on their Equifax credit report to prevent fraud and identity theft.
TransUnion Canada lets you view and download your free Consumer Disclosure online once a month. This report does not include your TransUnion credit score, unless you’re a Quebec resident. You can also request a copy by phone, mail or in person. Visit their website to learn more about their credit monitoring services.
This table lists applications alphabetically and isn’t exhaustive. Hyperlinks to external sites do not constitute endorsement by BDC of those websites or any information, opinions, products or services expressed or described on them.
Furthermore, the list is only a starting point and excludes applications not offered either in English or in French, or that are neither low cost nor free. When assessing which solution is best for your organization, you will probably consider many other factors.
BDC will review and edit this list regularly. If you are a provider of credit reports for entrepreneurs and would like us to consider adding your solution, please contact us.