What are my rights around credit checks?

In some circumstances, certain companies may request to “pull” (access) and review your credit history. Typically, these companies offer postpaid services to their customers (such as telecom services and utilities), so the company might use a credit check to assess whether you are likely to make their payments on time.

There are two types of third-party credit inquiry:

1. Credit Related Inquiries (“hard” inquiries) and;

2. Non-Credit Related and Account Review Inquiries (“soft” inquiries).

Hard Inquiry

When you apply for a credit product e.g. a line of credit or a mortgage), companies may request your consent to access their credit report to assist in their lending decision. However, other kinds of credit checks (including for tenancy and cell phone service) can be counted as hard inquiries, depending on the entity checking your credit. Each time this occurs, an inquiry is listed on your credit file. According to Equifax, these inquiries appear on the file for 24 months and are visible to other companies viewing the file. However, a hard inquiry could remain on the file for longer than 24 months with different credit reporting bureaus. These pulls can lead to your credit score dropping by several points, and can have an even greater impact if you have a short credit history and/or very few credit accounts.

Soft Inquiry

Non-credit related inquiries and account review inquiries have no impact on an individual’s credit score. With consent or as authorized by law, companies may access all or part of your credit information before completing a transaction or entering into a commercial relationship for purposes other than credit (non-credit related inquiry) and/or to periodically review credit behaviour after establishing a relationship (account review inquiry). You may also view his/her own credit report and score, which will typically be counted as a soft inquiry. These inquiries are visible only to the client (for between 12-24 months) and not to potential lenders.