The Collection Advisor

The Credit Bureaus of Canada and Collection Agencies

Posted by Brian Summerfelt on Apr 15, 2016 3:31:31 PM

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How Credit Bureau Reporting Helps a Collection Agency Collect

“How can a collection agency impact my credit bureau rating?”

That's a question we’re commonly asked. 

First, let me clarify: there is not a singular government-operated credit bureau in Canada but three independent, privately owned organizations. Collections through a credit reporting collection agency can affect a debtor’s credit rating, which is in fact one of the most important benefits of using a credit reporting collection agency. 

The Credit Bureaus of Canada
(a.k.a. Credit Reporting Collection Agencies)

In Canada, there isn’t one authoritative report or credit rating that can accurately be called one’s Credit Bureau of Canada report. Incidentally, a credit bureau by the Wikipedia definition is a collection agency

Most often when someone speaks of their personal “credit bureau rating” they are referring to the credit scores and credit reports generated by a credit reporting organization. These are known as a consumer reporting agency in the United States, credit reference agency in the United Kingdom, a credit reporting body in Australia, and a credit reporting agency here in Canada. 

A credit reporting agency is simply an enterprise that compiles, curates and provides credit grantors with information on people’s borrowing and bill-paying habits. 

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The Major Credit Bureaus in Canada

In Canada, there are two major credit reporting agencies for consumers: Equifax and TransUnion. For businesses, the most popular credit reporting agency is Dun & Bradstreet. Some, but not all collection agencies report the debts assigned to them for collection to one or more of these, so it is important to verify that your collection agency is a credit bureau reporting collection agency. At MetCredit, we report all consumer collection accounts to Equifax and TransUnion, and all commercial collections to Dun & Bradstreet. 

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Each credit reporting agency operates autonomously, and they do not tend to share information, so the credit score you have at Equifax may differ from the one at TransUnion. These “Credit Bureaus” get their information from lenders like banks and from collection agencies like MetCredit. 

To obtain your personal credit report from TransUnion click here.
To obtain your personal credit report from Equifax click here.
To obtain your business credit report from Dun & Bradstreet click here.

How a Credit Bureau Reporting Collection Agency Can Help Businesses Collect Debt in Canada

For collection agencies that report debtor accounts to the Credit Bureaus of Canada, collections can be considerably easier. Once an individual’s or a business’s credit report indicates that a collection agency has been assigned to collect on it, there is a substantial negative impact on its credit score. 

In many cases, a debtor will want to avoid this impact by paying the debt before the report is initiated, as failure to do so can make it impossible to obtain a mortgage, line of credit, auto loan or other financing.

Once the debt is reported to a credit bureau, the barrier to obtaining credit will persist until the collection agency reports the debt to the credit bureau as paid. Still, even after the paid-up collection is reported to the credit bureau, in Canada it generally takes six years before the individual or business's credit score impact is fully restored. That being said, a paid debt looks much better to any lender than an unpaid one, and it is important to any debtor that the account is paid promptly so the restoration period can begin. Check out this article about how your credit bureau can affect your lifestyle and how credit scores work.

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In addition to the credit score leverage, a good collection agency has an arsenal of other collection tools, including professional negotiation skills, debt collection software, and at larger agencies like mine, an in-house legal collections team. Our goal is to collect on every new account within 48 hours of receiving it.

To get started collecting debt now with a credit bureau of Canada reporting collection agency, contact me directly, fill out this 30-second form, or call 1-888-797-7727 to speak to a debt collection expert.  

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