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Even though freezing credit can be done, it can’t be done everywhere in Canada. This has a lot to do with how credit and the credit bureaus are regulated. That said, even if you can’t freeze your credit, there are still other ways that you can protect yourself.
Reasons You Would Freeze Your Credit
For those who have had issues with fraud and identity theft, a credit freeze wouldn’t allow anyone to gain access to your credit report through the credit bureaus. While fraud alerts will notify you if your credit has been run, a credit freeze doesn’t allow your credit to be run unless you allow for a break in the freeze or remove it. It doesn’t affect existing accounts, though.
If you’ve already had your SIN number or any of your information stolen, a credit freeze is one way to guarantee the thief won’t be able to apply for credit under your name. However, you won’t be able to either unless you lift the freeze. That said, there are other reports you can file with the credit bureaus to protect yourself and have more control over who runs your credit. You can even request extra identity verification to prevent a data breach of your credit information and help identify alerts.
Equifax Credit Freeze Canada
While you are able to lock or freeze your Equifax credit report with Equifax Canada, you can only do so in other countries like the US, and Quebec. If you choose to put on a credit lock, you can do so by phone or online, and it will take effect immediately. You can also choose to temporarily lift this freeze at any time, however, it will reactivate after. You can even contact them, National Consumer Relations, by mail.
If you’re in collections, however, this lock doesn’t block access to collection agencies to your credit report. All it does is prevent lenders from seeing your credit report in order to offer you new accounts. In some cases, a lender you already work with may have their own credit system, so you still may receive pre-approved credit offers for credit card accounts and other credit accounts.
TransUnion Credit Freeze Canada
In Canada, TransUnion Canada will allow a credit freeze for Quebec residents with or without suspicious activity on their report. This is the other large credit bureau in Canada. However, you do have to ask for a credit freeze separately from the one that you have with Equifax. This is because these bureaus are two separate identities, and they will want to verify your identity.
That said, the freeze process works the same way with TransUnion and Equifax. It stops potential creditors from assessing you for new credit options, you from entering into a new long-term lease or purchase, or entering into a new payment plan. It even stops them from accessing your financial information. This can be lifted or suspended by you at any time. However, if you ever do have any fraud activity on your report, you should also report it to the Canadian Anti-Fraud Centre.
Credit Freezes Based on Province
While there are many different options to protect you against identity theft, the only province that allows it in Canada is Quebec. With the other provinces, you have to use other methods for added protection. However, with the necessary information, consumers can still make sure fraudsters are blocked from accessing their money.
Ontario
While a credit freeze will prevent financial theft, it isn’t available in Ontario. That means that the next best option here is a credit alert that comes with little to no cost. A credit alert will warn you whenever your credit is run and added to your credit log. If you didn’t authorize this, you can then dispute it and have it withdrawn from your credit report. This is available with both TransUnion and Equifax.
Alberta
In Alberta, you can’t get a credit freeze, but you can get a fraud warning or fraud alerts put on your account. These alerts last 6 years, and they can help protect your credit file from severe damage. You don’t need to have any reason to add a fraud alert, it can be done at any time.
BC
Protecting your credit works the same in BC as it does in Alberta and Ontario. Fraud alerts, credit monitoring services, and checking your credit score often are a great way to reduce the impact of financial theft and protect your credit score.
Quebec
As we mentioned, Quebec is the only province in Canada that offers credit freezes due to the Credit Assessment Agents Act. This credit freeze is available along with any other tools available throughout Canada to help protect your credit score. This credit freeze won’t protect you from other types of identity theft, just financial.
Why Credit Freeze Isn’t Available in Canada
The main reason that credit freezing isn’t available in all of Canada is that this type of legislation is made at the provincial level. In other words, each province will decide whether or not to allow this. If it is decided they will allow for it, then legislation will have to be filed to allow the credit bureaus to perform this action in the province, even though they have the capability to do so.
Does Freezing Your Credit Hurt It?
No, just like placing a fraud alert on your credit report doesn’t hurt your credit score, neither does freezing it. During this time, you can still request to see free copies of your own credit score, and you can still place fraud alerts on your account. You’ll even still be able to increase your score with any current loans and credit lines you have; it’s just lenders who won’t be able to see it until you lift the freeze.
Freezing Your Credit With More than One Bureau
In short, yes, you can. You can choose to freeze your credit, also known as a security freeze, with both Equifax and TransUnion, but this will have to be done separately. This is because each credit bureau has its own reporting system, and they don’t report to each other. This is also why you may notice that you have two different credit scores. Lenders can choose which credit bureau they report to.
Your Credit Report, and What Happens to it After 7 Years
While there’s a common myth that your credit report will reset after 7 years, that just isn’t true. However, what is true is that negative information can fall off of your credit report after 7 years, whether it has been paid or not. In some cases, it’s actually 6, depending on the credit bureau. However, depending on the credit bureau and the bankruptcy type, bankruptcy can stay on your report anywhere from 7 to 10 years, depending on when it was completed.
If you have negative tradelines, like collections or consumer proposals, these can be negated with positive tradelines. However, you may notice getting credit is more difficult until they fall off your report. With collections, these items stay on your credit report for 6 years from the date of your last payment, and consumer proposals will stay for 3 years after your last payment or 6 years after you sign the agreement, whichever comes first. If you have a debt management plan, this will fall off 2 years after your last payment is made.
Final Thoughts
While freezing your credit score is a great tool to take advantage of when looking to protect yourself and your credit score from financial fraud, it isn’t the only option. You can pay close attention to your score, set up fraud alerts, and more. Since a credit freeze is only available in Quebec, these are often the options that people take.
While it doesn’t look like the ability to perform a credit freeze is going to be available in Canada anytime soon, it could if the legislation is passed. Since this is done at a provincial level, it’s not likely that it will ever happen to every province. That said, if it does, the credit bureaus do have the capability in Canada for offer it.
