Disputing an Error on Your Credit File

Errors in credit files are more widespread than most people realize and can directly impact your ability to obtain a favourable mortgage in Canada. A Canadian study found that nearly one in four consumers has at least one error that could affect their score. Fortunately, Quebec and fédéral legislation protects you by granting the right to dispute and have corrected any inaccurate information in your Equifax or TransUnion file.

Your Legal Rights in Quebec and Canada

In Quebec, several laws govern your rights regarding your credit file. The Consumer Protection Act (CPA), the Civil Code of Quebec (CCQ, articles 35 to 41 on reputation and privacy), and the Act Respecting the Protection of Personal Information in the Private Sector grant you the right to review your file, dispute any inaccurate information, and demand its correction or removal. Credit bureaus are required to conduct an investigation within 30 days of receiving your dispute. If the investigation confirms the error, the information must be corrected or removed immediately.

Types of Errors to Watch For

• Mixed files: accounts belonging to another person with a similar name appear on your file. This is particularly common with frequent names.
• Incorrect balances: a payment made has not been recorded, or the displayed balance differs from your current account statement.
• Erroneous late payments: a payment made on time is reported as late by the creditor. Check your bank statements to prove the payment date.
• Closed accounts shown as open: an account you closed continues to appear as active, which can affect your debt ratio.
• Collections for already-paid debts: a collection account whose debt has been settled has not been updated to reflect the payment.
• Inaccurate credit limits: the reported limit is lower than your actual limit, artificially inflating your utilization ratio.

Step-by-Step Dispute Process

1. Document the error: Gather all évidence of the error: bank statements showing payments made, correspondence with the creditor, account statements, clearance letters. In Quebec, these documents have evidentiary value recognized by the CCQ.
2. Draft your dispute: Write a clear letter precisely identifying the error, the account number involved, and the correction requested. Include your full name, address, date of birth, and the last four digits of your SIN for identification. Attach copies (never originals) of your supporting documents.
3. Submit the dispute: Send your dispute by registered mail with acknowledgment of receipt to the dispute address for Equifax or TransUnion. You can also use the online portals, but registered mail offers better traceability. Keep a copy of everything you send.
4. Also dispute with the creditor: In parallel, contact the creditor directly to request they correct the information at the source. If the creditor confirms the error and notifies the bureau, the correction will be faster. Request written confirmation of the correction.
5. Follow up after 30 days: If you have not received a response within 30 days, follow up with the bureau in writing, reminding them of the legal obligation to respect this timeline. Check your updated credit report to confirm the correction has been applied.

Recourse If Your Dispute Is Denied

If your dispute is rejected and you are convinced the information is erroneous, several avenues of recourse are available in Quebec and Canada. You can add a consumer statement to your credit file explaining your version of events (limited to 100 words at Equifax). You can file an official complaint with Quebec's Office de la protection du consommateur (OPC), which can investigate and intervene. The Office of the Privacy Commissioner of Canada can also be contacted for matters falling under the Personal Information Protection and Electronic Documents Act (PIPEDA). As a last resort, a lawyer specializing in consumer law can assist you in taking action before the Small Claims Court or the Superior Court of Quebec.