Good afternoon, Mr. Vice-Chair and members of the committee. Thank you for the opportunity to appear before you today. I truly appreciate your understanding that my remarks will be in English only.
My name is Julie Kuzmic. I am representing Equifax Canada Co., one of Canada's two major nationwide credit reporting agencies, or credit bureaus, as they are commonly known. My role at Equifax is senior compliance officer, consumer advocacy, which keeps me highly focused on two key areas: one, Equifax's compliance with consumer protection and other applicable legislation; and two, helping people in Canada navigate their own credit decisions with more confidence in order to live their financial best.
Understanding the study at hand as it relates to credit card practices and regulations, I would like to provide context as to the role Equifax plays in Canada's credit ecosystem. Equifax Inc. is incorporated in the U.S., and is the parent company of Equifax Canada, which is incorporated here in Canada. It operates independently pursuant to Canadian laws and regulations. As a licensed Canadian credit bureau, Equifax Canada is subject to provincial regulation, as well as federal privacy and other applicable legislation.
We live in a credit-based economy. Although Equifax Canada plays an important role, which I will elaborate on shortly, Equifax Canada does not extend credit to consumers or businesses. Equifax does not give recommendations to lenders, such as credit card issuers, on whether they should approve applicants. Further, Equifax does not collect payments from borrowers. Equifax's role is maintaining the contents of Canadian consumer credit files, which we use to deliver products to lenders, such as credit reports and credit scores, in compliance with applicable legislation. I would like to offer some insights into how these pieces fit together.
Many of the banks and lenders in Canada collect and report information about their consumer accounts to Equifax. Examples of these types of accounts include mortgages, lines of credit, installment loans, and, of course, credit cards. Equifax maintains a database of the information associated with a particular consumer in the form of a credit report, also called a credit history or credit file.
I will use the term “credit report” in my remarks. An individual's credit report contains the credit account information that has been reported to Equifax, along with other data lawfully sent to Equifax, such as collections accounts, insolvency-related information and legal judgments that are financial in nature.
To zero in on credit cards specifically, the type of data that is sent to Equifax by the credit card issuer would typically include the account balance, credit limit, amount of previous payment and information around past payments, which may have been late or overdue. This snapshot of account data does not include any information about the interest rate associated with that particular credit card.
Each credit account on an individual's credit report is typically updated monthly on a rolling basis. Someone checking their own credit report on a given day will see the information associated with each account that was most recently reported. For example, people monitoring their Equifax credit report may find that their Mastercard account typically gets updated on the sixth of each month, while their Visa card account is typically updated on the 21st.
One of the pieces of information that is not maintained on a consumer credit report is a credit score. Credit scores are calculated on demand. A credit score is a three-digit number between 300 and 900 that serves as a behavioural prediction of how likely a consumer is to pay his or her bills on time, based on the data available on that person's credit report at the time the score is calculated.
I'm happy to elaborate on credit scores; however, in the interest of time and the focus of your study, I will highlight that credit card fees and interest rates are not reported to Equifax. They, therefore, have no direct influence on a consumer's credit score.
At Equifax, we're focused on helping Canadians. We believe consumers can make more informed financial decisions when they are empowered with greater credit literacy.
In addition to the substantial educational [Technical difficulty—Editor] on people who are new to Canada, new to credit or rebuilding their credit following a difficult financial situation. We are often consulted by government, regulatory and non-profit organizations to help ensure their—
