New Chapter 4: Understanding Credit
Your credit report and credit score are two of the most important tools for understanding your financial health — and the good news is, you have the right to access them. In many countries, credit reference agencies are required by law to give you at least one free credit report every year. Your credit score, however, may not always be included for free, so you might have to request it separately (or use a service that offers it at no cost).
How to Get Your Credit Report and Score
You have several options:
Go directly to the credit reference agencies
In most countries, there are two or three main agencies that track your credit history. In Canada, it’s Equifax and TransUnion. In the US, it’s Equifax, Experian, and TransUnion. In the UK, it’s Equifax, Experian, and TransUnion.
Visit their websites, follow the steps to request your report, and confirm your identity with some personal details (like your address history).
Check through your bank or credit card provider
Many banks and credit card companies have partnerships with credit agencies and let you view your score directly in your online banking or mobile app. This can be one of the easiest ways to keep tabs on your score without having to go to multiple websites.
Use a reputable third-party credit monitoring service
Services like Credit Karma (Canada, US, UK) or Clearscore (UK, Australia, South Africa) pull your information from one or more agencies and show you your score for free. They often send monthly updates, notify you of changes, and give tips for improving your score.
Why Check Regularly?
Your credit report is like a snapshot of your financial history, and mistakes can happen. Sometimes lenders report incorrect information, or fraudulent activity can appear without your knowledge. Checking your report regularly helps you:
Spot errors and dispute them before they hurt your score
Detect identity theft early
Track your progress if you’re trying to improve your credit
Even if you’re not applying for credit right now, knowing where you stand gives you more control over your financial future.
Hard Checks vs. Soft Checks
Every time someone looks at your credit report, it’s recorded as an inquiry. There are two main types:
Soft Checks (Soft Inquiries)
Happen when your credit is looked at for informational purposes.
Examples: You check your own score, a lender pre-approves you for an offer, or a landlord does a background check without a full application.
Impact: Soft checks do not affect your score, so you can do them as often as you like.
Hard Checks (Hard Inquiries)
Happen when you apply for new credit (credit card, mortgage, car loan, personal loan, etc.).
The lender pulls your full credit report to decide whether to approve you.
Impact: Can temporarily lower your score by a few points. Multiple hard checks in a short period can have a bigger impact and may make you look riskier to lenders.
Why the Difference Matters
If you’re planning to make a big purchase soon — like a home — it’s smart to avoid unnecessary hard checks in the months leading up to your application. For example, applying for a car loan just before applying for a mortgage could lead to a higher interest rate or even make approval harder.
Some types of credit applications (like shopping around for a mortgage or car loan) may count multiple hard checks in a short time as a single inquiry, but this depends on your country and the credit scoring model being used.
Quick Tips for Checking Your Credit Safely
Use soft checks to keep an eye on your score without lowering it.
Spread out credit applications so multiple hard checks don’t cluster together.
Check all major agencies to get the full picture — each one might have slightly different information.
Save copies of your credit reports so you can compare changes over time.
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