The Best Credit Score Monitoring Services in Canada
Your credit score is more than just a three-digit number; it’s a numerical representation that measures your overall credit health. Through analyzing your credit report history and seeing your credit score, financial lenders can estimate the amount of your loan default risk (how much money you’re eligible to borrow – if any). In Canada, your credit score is calculated by one of two organizations: TransUnion and Equifax. These credit bureaus will analyze your debt and credit management to give you an all-encompassing number. This number can be applicable Canada-wide to describe your trustworthiness as a borrower. In many cases, it’s simply not enough to check your credit score once per year – you should be actively monitoring it for optimal decision-making in order to potentially increase its value, and to protect your finances from unsolicited criminal activity.
After reviewing the most positively reviewed credit monitoring software companies in Canada, we highly recommend siding with Borrowell and CreditVerify.
Borrowell helps people make great decisions about credit. With its free credit score and report monitoring, automated credit coaching tools, and AI-driven financial product recommendations, Borrowell empowers consumers to improve their financial well-being and be their own credit’s personal hero.
Credit Verify takes pride in helping customers take control of their credit report, educating and providing them with the tools they need when applying for any kind of financing situation.
TOP CREDIT SCORE MONITORING COMPANIES IN CANADA
Established in 2014, Borrowell is a Canada-wide online financing firm that specializes in personal lending with low interest rates. While they have successfully grown their reputation through the digital loan market, they’re steadily gaining traction with their free credit score offering. Since the launch of this innovative financial product, they’ve serviced more than one million Canadians nationwide.
In terms of value, Borrowell is a company that’s dedicated to support your financial well-being. They provide you with one of the best Canadian credit monitoring services, a free credit score check that gets updated every month, and personally-relevant financial product recommendations. The company truly believes that anytime is a good time to check your credit score, and so they offer you the necessary tools that can help you improve your financial situation. The credit scoring system that Borrowell utilizes is called the “Equifax Risk Score 2.0” (based on the Canadian credit bureau Equifax) which involves a 300 to 900 scoring range. Additionally, the company offers to oversee your personal credit account by monitoring it for unusual activity – credit bureaus also offer this service, although it typically comes at an increased cost.
To receive your free credit report and credit score with Borrowell, signing up is simple. The first step is to register an account with them by providing them with a few personal identification details (no credit card or SIN number required). Then, Borrowell will ask you a few questions to verify your identity. And you’re done! If you’re eligible you’ll be able to use Borrowell’s credit services the moment your account is activated. The average signup time is approximately 3 minutes from inputting your relevant information to receiving your credit score. In terms of what you can expect to receive from Borrowell’s credit monitoring report, you’ll have access to your detailed personal finance history: number of credit inquiries, banking statements, account statuses, and more. Note that if you request a personal credit score check from Borrowell it is considered a soft check, so the act would not have any adverse effects on your credit report. In a recent study performed by Borrowell, the company has determined a positive correlation between frequent credit monitoring and credit improvement over time.
Powered by TransUnion, the alternative Canadian credit bureau to Equifax, Credit Verify specializes in shielding you from identity theft through their credit monitoring practices. Cyber security is a trending topic in the today’s digital age, and it comes as no surprise. The previous couple of years alone have been rampant with serious personal data breaches and identity-specific information leaks across the continent.
Credit Verify works to both help protect you of identity theft, and aids the rebuilding/restating of your credit situation in the unfortunate event you become a victim. The company achieves this by continuously scanning for any errors or strange behaviours related to your credit account at a $29.95 monthly subscription fee, which activates after a 7-day trial period. In addition to the company’s core offering (credit monitoring), Credit Verify also provides credit improvement resources, help with personal debt management, and credit card accessibility.
Through their signup process, you receive immediate access to: everyday credit file access on behalf of TransUnion, unlimited credit report/score checks, account alerts for fraudulent and suspicious activity and credit analysis tools. Much like all other credit monitoring software on the market, Credit Verify credit reports count as a soft check (no negative credit impact) when used for personal reasons. CreditVerify claims that a large percentage of individuals discover personal credit errors when examining their credit history, so it’s best to act fast.
Identity Guard is a company that solely offers credit account monitoring and protection-related services. It is significantly more “bare bones” than the two aforementioned companies, in the sense that it does not offer a wide range of financial products. However, Identity Guard does do the basics of credit monitoring very well. For $17.99 a month (applicable after a 30-day free trial signup bonus) you’ll receive the Identity Guard guard protection package. This includes: dual-bureau credit monitoring (reviewed on both Equifax and TransUnion systems), quarterly updated credit reports and scores (not monthly), identity-related alerts, and a mobile application.
WHAT YOU NEED TO KNOW ABOUT CREDIT AND CREDIT MONITORING SOFTWARE
At the individual level, Canada’s credit system operates on a credit score range from 300-900, with 900 being the best possible credit score. Your credit score signifies not only a lender’s willingness to loan you money, but also the terms and conditions of said loan. Theoretically, you can secure bottom-tier credit from unfavourable lenders (not recommended), but it will likely come with a viciously high interest rate. Bettering your credit score can often create a positive feedback loop with your personal finances. This means that as your credit score improves, your debts may also improve (better insurance premiums, better utility plans, etc.). And as your debts become easier to repay, your credit score can potentially increase – as long as you’re making timely debt repayments. If you’re managing your finances correctly, your credit score should improve with age.
741 to 900: “Excellent Credit Score”
If you fall under this category, you can enjoy fast approvals for any loans that fit your budget (within reason), very competitive interest rates, and high credit card limits. In order to be considered in this group as a financial VIP, you’d need to develop a spectacular credit history. This means having virtually zero late payments on all personal credit-related debts, frequently clearing account balances, and operating at a very low credit utilization rate.
690 to 740: “Good Credit Score”
While a lender wouldn’t consider you the best of the best, in this credit range you’re still eligible for some of the top financial services offered on the market. Even though your financial standing may not be perfect, falling in this credit range signals to lenders that at the very least you’re a respectable borrower. You may encounter some restrictions when negotiating for the very best rates out there, but as a general statement you’re likely to be approved for the vast majority of credit products.
660-689: “Average Credit Score”
Although average credit scores vary by province, the most common credit score range for Canadians falls between 650-670. Of course, there is a lot of room here for credit rating improvement, but this range shouldn’t be a massive hindrance in getting loan approvals. If anything, you should be eligible for similar financial products and services as people with “Good” credit scores – except your deal won’t be as favourable. As a result, you’ll likely witness the same loan options but with higher interest repayments or other adverse conditions.
575-659: “Poor Credit Score”
If you fall in this range, this is typically where you’ll start to see financial institutions refusing to loan you money or exclusive credit offers. Virtually any borrowing you execute within this credit range will be subject to unfavourable loan conditions (high interest rate, strict repayment schedules, etc). You’d also be turned away from any premium credit cards that are offered by reputable financial institutions. Finding yourself with a poor credit score means you’ve racked up multiple missed payments, or been unable to payback a loan in the past.
300-574: “Very Poor Credit Score”
Unfortunately, if you’ve discovered that your credit score is less than 575, you’re placed at an extreme credit-obtaining disadvantage. Any loan requests you choose to sign under here will almost always include unfavourable conditions, and you’d be automatically exempt from mid to high end financial products. To land in this range you’d need to have a significantly weak credit history – usually one carrying multiple loan defaults, bankruptcy scares, and frequent maximization of credit limits (also can be interpreted as having a high credit utilization ratio).
What Does a Credit Report Contain?
While a credit score acts as a brief summary of overall credit health, a credit report embodies all the details – it’s essentially a complete credit analysis that a financial institution considers when determining if you’re worthy of a loan. A Canadian credit report consists of personal identification info, credit repayment history, banking track record, names of lenders you’ve been involved with, and any judgements affecting the worthiness of your credit. As a Canadian resident, you’re allowed up to one free annual credit report performed by either TransUnion or Equifax. This is known as a consumer disclosure credit report. It’s important to actively monitor your credit report so you can dispute any misrepresentations or fraudulent behaviour in a timely manner.
What Goes Into Your Credit Score Calculation?
The number one single most important credit score factor in Canada is your payment history. This is very understandable, since all lenders need to see written proof of your ability to make timely loan repayments. Payment history considers all of your personal consumer debt, but excludes mortgage loans. Details of payment history will typically include: your ability to consistently make payments based on pre-agreed loan terms, ability to avoid payment deferrals, and ability to steer clear of bankruptcies. Unfortunately, we can only make speculations on how large of an impact each financial wrongdoing will have on your total credit score –the credit bureau scoring algorithm is not publicly available. However, at a more general level our understanding is that poor credit behaviours will have a greater impact on high credit scores than they would on lower scores. We assume this is to give individuals with lower credit scores a more generous opportunity to climb the credit ladder.
Another key factor that gets calculated into your credit score is your credit utilization ratio. In simple terms, credit utilization is the sum of your total credit that is currently in use relative to your credit limit. For instance, if you use $100 worth of credit on a $500 limited credit card, and $100 worth of credit on a $1000 limited credit card, your credit utilization ratio would be 13%. This is due to the fact that you’re leveraging $200 out of a possible $1500, which gives you 87% room left in available credit. As a general rule, you should keep your total utilization ratio under 30% to avoid any penalties associated from using too much credit at once.
While they’re usually not as important as the aforementioned factors, credit agencies will almost certainly include your credit time span and credit diversity into the score calculation. Both of these concepts are much simpler than payment history or credit utilization. Your credit time span just represents how much time you’ve spent using credit instruments, and if you’ve managed to use them consistently. Lenders like to see individuals with a longer credit history, since they have more skin in the game and are less likely to default. Credit diversity represents the various credit instruments you use. The more credit products you’re able to successfully manage, the better it looks. For better visualization, think of owning credit cards like the act of juggling tennis balls – balance is extremely important in any case, but it looks more impressive when you can juggle three tennis balls, a basketball, and a soccer ball instead of just two tennis balls.
Lastly, a credit bureau will also glance at the types of credit checks you’ve executed in the past. A hard credit check takes place each time you request another loan or new credit card. If a credit bureau notices you’ve taken on an abundance of “hard” checks in a relatively small time span it can lower your credit score by a few points. This is because an excessive amount of credit card applications can easily be viewed as having weak financial health, since it shows an over reliance on credit. On the other hand, a soft credit check inflicts no damage to your credit history – meaning you can execute as many “soft” checks as you prefer. Credit checks are deemed as “soft” whenever you or a third party takes a look your credit status for non-loan related purposes. Tip: you can take advantage of periodic soft checks to monitor your credit health and make sure that everything is in order.
What is Credit Monitoring?
Financial credit monitoring services are effectively “credit assistants” that you can apply for to oversee your credit status. The number one advantage to using credit monitoring services is the ability to make frequent soft checks on your credit health. Instead of being limited to the annual consumer credit report offered by Canadian credit bureaus Equifax and TransUnion, you can access the information whenever it’s needed. Credit monitors will also continuously inspect your credit profile for any fraudulent misconduct. The software will alert you of any unnatural behaviour, such as a spontaneous account activity from an unknown location. To summarize, credit monitoring services provide you with up to date history on your credit worthiness, protect your identity, and can put you on the right track in terms of increasing your credit score.
OUR THOUGHTS ON CREDIT MONITORING SOFTWARE IN CANADA
The bottom line: It never hurts to take actions that achieve financial peace of mind. No matter how you choose to look at it, monitoring your credit either periodically or continuously is highly important. While some individuals get by on one free annual credit check from major credit bureaus, using third party companies to receive more frequent and timely credit reports can paint a clearer picture of current credit health and enables you to take quicker action in the event of identity theft. In a time where cyber security is of the utmost importance to your digital profile, you can no longer afford to ignore your credit health by letting it sit in the background.
For more information on the topic of credit, click here to see our brief guide to the
Best Credit Cards in Canada
Credit Score Monitoring Frequently Asked Questions (FAQs)
How can I improve my credit score?
There are several ways to improve your credit score, although the exact impact each independent action will have is hard to accurately predict. The majority of lenders will agree that the most essential action to increasing your credit score is timely bill payments. Reliability to lenders is very important, as past repayments can be indicative (to some degree) of future repayments. Another important action is to maintain low monthly balances on your credit cards. Ideally, you want to have a low credit utilization ratio – which is defined as the amount of credit you actually use divided by your total credit availability. This leads into the concept of opening multiple credit cards to improve credit score, since the act of having many account balances will theoretically lower your credit utilization ratio. As a result, it can also prove beneficial to the cardholder to keep inactive credit cards rather than cancel them – since removing them entirely can hurt the credit score by increasing credit utilization. Knowing all of this, when aiming to maintain a healthy score remember to be proactive and not just reactive. Being proactive in this case means to avoid burdening yourself with credit debt unless it is actually needed. Don’t make any unnecessary inquiries about extending limits or taking on additional lines of credit – you’ll hurt yourself in the long run if your financial situation ever changes for the worse.
How do companies make money off free credit reports?
In the case of Borrowell; they don’t – at least not directly. Companies such as Borrowell that offer free credit-related services make their profit from leveraging alternative financial products on their platform, which is based on the assumption that you’ll use them by the convenience of having a financial one-stop shop. While these companies will likely charge you fees for their main services (such as personal loans), you would effectively pay zero dollars if all you needed was a timely credit check.
Do credit monitoring services prevent identity theft?
Unfortunately no. While leveraging credit monitoring services can certainly make you more aware of your credit situation, basically helping you spot suspicious activity sooner, they cannot guarantee full protection of your identity. In a practical sense, these services aid in mitigating damages related fraudulent activities once they’ve already been executed. Personal identity protection is primarily the responsibility of the individual. At the end of the day, you’re ultimately liable for credit mishaps – which is why it’s best to shield your identity as best as you can.
How do I know if my personal identity is being stolen?
While most credit monitoring services will alert you to any strange credit behaviours under your name, it’s best to understand the circumstances yourself. Typically a few signs credit bureaus use to determine identity theft are: unauthorized credit purchases, random fees and account withdrawals, new addresses or other personal information changes, mail being redirected to another address, random credit application denials, and being contacted by unfamiliar lenders.
What should I do as a victim of identity fraud?
As soon as you discover your personal identity has been compromised, you should phone in and report the event to the police as soon as possible. Once they’ve logged your case, begin calling your financial service providers and making any necessary account changes/security measures. When considering credit cards, you should deactivate any current cards and change the account numbers upon request with your financial institutions. Afterwards, get in touch with your main credit bureau (Equifax/TransUnion) and notify them in order to flag your account as a victim of identity theft, so that you would be automatically notified of any new credit behaviours moving forward. Last but not least, it’s a good idea to contact the Canadian Anti Fraud Centre too, since they may be able to provide you with additional resources and support. They’re also largely responsible for the legal investigation behind the fraudulent activity.