Dealing with debt can be stressful, especially if you’re worried about the potential impact on your credit report. Learn more about how debt can affect your credit score and some ways you can update or change your credit report.

Understanding your credit report and credit score

  • Your credit report is a summary of your credit history. It starts when you borrow money for the first time. Lenders send information about your accounts to the credit reporting agencies.
  • Your credit score is a three-digit number that is calculated based on the information in your credit report. It shows how risky it would be for a lender to lend you money.
  • Your credit report and credit score are used by people and businesses to help make decisions about things like lending money to you, collecting a debt, or renting a property.

How debt impacts your credit report

The Financial Consumer Agency of Canada (FCAC) website says that your credit report can include both positive information (a good repayment history) and negative information (missing payments, previous bankruptcies, or having a debt go to collections), all which impact your credit score. You get points added to your credit score if you use your credit responsibly and lose points if you have trouble managing your credit.

For example, once a payment is overdue on a debt, it may be reported to the credit reporting agency. If a debt has gone to collections, it may also be reported to the credit reporting agency and added to your credit report.

Unless removed by the creditor, a debt will remain on your credit report for 6 years.

If you’re worried about your credit score, don’t lose hope. It can change over time and there are ways to improve it.

For more details about your credit report and credit score, explore these resources from the FCAC:

How to update your credit report

Depending on your situation, there are ways you can modify your credit report, remove a debt, or improve your credit score.

  1. Modify your report:

    If your credit report shows the wrong information about your debt, you can contact the original creditor to request they make the correction and then ask the credit reporting agency to fix the error.

  2. Remove a debt:

    If your debt has gone to collections, you can have a debt removed from your credit report if:

    • You dispute the debt successfully: If you don’t believe you owe the debt and successfully prove it in court, the creditor will remove it from your credit report. However, the debt will remain on your report while it is in dispute (until proven otherwise). Learn what steps to take to dispute a debt.
    • They have the wrong person: Sometimes creditors and collection agencies contact the wrong person. If you notify them that they have the wrong person, they should remove it from your credit report. Like disputing a debt, it will remain on your report until the situation is properly resolved. Learn how to notify a collection agency that you are not the debtor.

  3. Improving your credit score:

    The Financial Consumer Agency of Canada (FCAC) offers tips to improve the standing of your credit report and credit score. One way they suggest is to make your payments on time. Get more resources from the FCAC to learn how to improve your credit score. 

How to check your credit report

It’s a good idea to check your credit report every six months so you can keep tabs on your credit, monitor credit score improvement, and be alerted to any fraud. The two credit reporting agencies in BC are Equifax and Transunion. You can request a free written copy of your credit report directly from either credit reporting agency:

Getting calls from a debt collector?

We know dealing with debt can be stressful, especially if you’re getting collection calls. In BC, you have rights when it comes to debt collection. Not everyone’s experience with debt is the same but the rules apply to all of us. Learn your rights in BC and access tools and resources to help you on your debt journey.

Learn more

How to get the calls to stop
What to do if it’s not your debt
The rules debt collectors must follow in BC
The impact of debt on your credit report
4 ways to manage debt
Debt relief: Credit counsellors vs debt repayment agents
8 tips for choosing a debt relief service
3 simple steps to create a budget
How to save for a rainy day
How to prepare for changing interest rates

About Consumer Protection BC

We are responsible for licensing debt collectors and regulating certain aspects of the debt collection industry in BC. The law speaks to when a collector can contact you and how they can communicate with you. We can’t help with every debt related issue and we’re not financial advisors. Find out more about us and the other industries and transactions we oversee by exploring our website.