Credit is a gateway to a better life — for the vast majority of us, a high credit score is essential for accessing funding. Only there’s a big problem. Paying your bills on time isn’t always enough to keep your credit in good standing. Your criminal record could also be holding you back.
So how much difference does a conviction for a criminal offence make? Here’s a breakdown.
Your Criminal Record and Your Credit Score
Credit scores are all about assessing risk. Credit reporting agencies don’t just gather information about your loans, credit card usage, bill payments, and other data for fun. They roll all of these factors into a report with a numeric score designed to facilitate easier lending decisions.
Unravelling the Tangled Web of Credit Histories and Criminal Records
Fortunately, if you have a conviction that was discharged or pardoned, it won’t show up on your credit report. No worries, right?
…Not so fast. The nature of a past conviction can have a long-lasting impact on your score, even if it’s not laid out in plain language. Your score will take a hit — and lenders will know — if your offences had to do with things like:
- Writing bad cheques or attempting to make payments without the necessary funds,
- Having your accounts closed because you owed money or committed fraud,
- Fraud and identity verification alerts prompted by other agencies or consumers, or
- Filing for bankruptcy or being found liable for credit-related matters in civil court.
Managing Your Credit Score
Credit reporting isn’t always clear-cut. With so much information and regulation involved, it’s easy to get confused.
As a consumer, staying updated is ideal. Canadians can access their scores anytime from the two main reporting bureaus: TransUnion and Equifax. There’s no excuse not to, considering it’s free — and you definitely need to know where you stand.
From there, you can try improvement strategies, such as:
- Paying your bills on time,
- Requesting a higher credit limit to lower your credit utilization,
- Disputing any mistakes or errors that might be harming your score, or
- Taking care of ongoing collections by reaching out to collectors.
The final strategy to know if you have a criminal record is to get your record sealed. Your credit report can’t include information about discharged or pardoned offences, dropped charges, or anything that happened more than seven years ago. Asking an AllCleared team member about sealing your record might help you develop a better relationship with credit.