‘I really struggled’: How an Ontario teacher got stuck with a zero credit score for years

Click to play video: 'Money123: How to build credit from scratch'
Money123: How to build credit from scratch
WATCH: Surveys show many Canadians are confused about what makes up a credit score, which can affect a person's ability to borrow money, rent a home and even get a job. In this week's Money123, Erica Alini explains how credit scores work and how you can build one from scratch. – Dec 7, 2019

Angela Monaghan, a Tiny, Ont.-based high school teacher, still remembers the time she went to her local Canadian Tire in the summer of 2019 to apply for a new store credit card to use for expenses related to the school orchestra.

The request was swiftly denied. The application had been flagged because according to the credit file, Monaghan recalls a store employee saying — matter-of-factly — she was dead.

The one who had, in fact, died was Monaghan’s late husband, who had passed in September of 2017 after a seven-year battle with cancer. But as Monaghan says she later discovered, a reporting error meant she had been recorded as deceased on her TransUnion credit report instead.

Monaghan’s story isn’t unique. Once credit bureaus are notified of someone’s passing, they place a death notice on their credit reports, a measure that helps prevent identity theft. But mistaken death reports do happen from time to time.

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Monaghan, though, says it took her nearly two years from when she became aware of the error to be formally resuscitated in full. And during that time, she says she had to live with a TransUnion credit score of zero.

Getting the mistake corrected, she says, has been ” a roller coaster ride” that left her “feeling insecure about financial stability.”

Click to play video: 'How your credit rating may be the wrong indication of your financial health'
How your credit rating may be the wrong indication of your financial health

A 'rare' credit reporting mistake

Many consumers know to check their credit reports regularly with both of Canada’s credit bureaus, TransUnion and Equifax. Credit reports, a detailed history of a consumer’s use of credit, contains essential information that both the two credit bureaus and lenders use to formulate credit scores, which rate an individual’s creditworthiness. The two credit bureaus each have their own credit scores, and lenders may use their own formulas to rate borrowers. In Monaghan’s case, the error appeared only on the TransUnion report.

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Credit report mistakes can result in lower credit scores, and consumers who spot an error in their records are typically advised to promptly flag it with the credit bureaus.

But Monaghan says for almost two years, her repeated attempts to correct the mistaken death report on her file led nowhere.

Global News has seen copies of the transmission log of a fax sent from Monaghan’s financial institution and addressed to both TransUnion and Equifax notifying them of her husband’s death shortly after his passing.

Monaghan also shared a copy of a letter sent by her bank via fax and addressed to TransUnion in September of 2020 confirming that she was, in fact, “alive and well.”

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According to documents reviewed by Global News, TransUnion opened at least two investigations into the matter in the fall of 2020. But even after the credit agency corrected the information about Monaghan being deceased, her TransUnion credit score remained zero, she says.

Making the process all the more taxing was a debilitating concussion Monaghan says she had suffered in February of 2019, an injury she says eventually forced her to go on disability leave.

“I really struggled to deal with … trying to convince them that I was alive dealing with the head injury,” she says.

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TransUnion has declined to comment on the specific of Monaghan’s case, saying it can’t discuss an individual consumer’s situation due to privacy reasons. However, it added it had reached out to Monaghan to address the issue.

“Mistaken reports of consumer deaths are rare, but they do happen on occasion,” the agency said via email. “TransUnion’s contact center will promptly correct a file on someone who has been reported to us incorrectly as deceased upon verification of a consumer’s identity. Consumers can reach TransUnion by phone at 1-800-663-9980.”

Shortly after Global News contacted TransUnion Canada, Monaghan says the agency contacted her via phone and resolved the matter. A day later, she says her TransUnion credit score had been restored.

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Improving credit score

Living with a credit score of zero

As many Canadians know, credit scores in Canada range from 300 to 900, with higher numbers on that scale usually making it easier and cheaper to access credit. Scores ranging from the mid-600s to the low 700s are usually regarded as “good.” Lenders are likely to see those with lower scores as higher-risk borrowers.

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A credit score of zero, though, usually means there isn’t enough credit information to formulate a score.

But Monaghan says the knowledge that “zero” indicates a lack of credit history rather than very poor financial habits was little consolation.

“It’s really embarrassing,” Monaghan told Global News, speaking before TransUnion restored her credit score this past week.

There were also real-life consequences, she says. Monaghan says that while she was able to continue to use the credit cards and line of credit she already had, she couldn’t apply for new credit.

“I actually started to date somebody and we’ve considered selling his place and selling my place and starting fresh,” she said, speaking while her TransUnion credit score was still zero. However, she added, “I can’t qualify for a mortgage.”

Monaghan also says she borrowed from her line of credit and quickly repaid the money, thinking the move would help her rebuild her score. It didn’t work.

But the very idea of having no credit history was frustrating, she says.

I’ve worked hard enough to have a good credit rating. I should be able to find a house and be able to say, ‘I’m confident I could get the mortgage,'” she said. 

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What can you do if no one fixes an error in your report?

Examples of credit report errors include incorrect personal information, payments made on time reported as late, or accounts listed that you never actually opened, which can be a sign of identity theft.

While Canadians can order a free copy of their credit report from both TransUnion and Equifax via mail or telephone, both credit agencies now allow consumers to also check their credit reports online free of charge.

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If you spot a mistake on your report, the first step is to ask the credit bureaus to correct it. Both credit-reporting agencies have an internal process to investigate credit report disputes. You’ll have to gather documents to support your claim.

It may also help to flag the issue to the lender responsible for the reporting mistake, according to an online guide to addressing credit reporting mistakes by the Financial Consumer Agency of Canada (FCAC).

If the lender doesn’t agree there’s been a mistake or you’re dissatisfied with the results of the investigation by the credit bureau, you can, of course, ask to speak to the manager.

But if escalating your case internally isn’t yielding results, your next step depends on whether the lender is federally or provincially regulated. For federally-regulated lenders like the big banks, you can turn to one of two external complaints bodies, the Ombudsman for Banking Services and Investments (OBSI) or ADR Chambers Banking Ombuds (ADRBO). You can ask your lender which of the two you should contact.

If you’re dealing with a provincially-regulated lender, like a credit union, you’ll have to turn to your provincial regulator, says the FCAC.

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If you believe the issue lies with the credit bureau, you can file a formal complaint with them. If you need to take it further, you can take your complaint to your provincial or territorial consumer affairs office, as credit reporting agencies are provincially regulated. In Quebec, send your complaint to the Commission d’accès à l’information du Québec (CAIQ).

Finally, if all else fails, you can lawyer up, says Omar Ha-Redeye, executive director of the Durham Community Legal Clinic in Oshawa, Ont. 

But legal action is the option of last resort, he warns.

“It’s a lengthier process. It typically involves some money in terms of hiring a lawyer. And there’s an uncertain outcome,” he says.

If you think you may have to go down that road, put as much as you can in writing, says Ha-Redeye. If you’re asked to speak on the phone, type up your recollection of the conversation shortly after and mail it or email it to the lender or credit bureau to establish a written record of what was said, he suggests.

“Having that type of information — with the date on the letter, that’s very important — will demonstrate that you have been trying to make efforts all along to rectify the situation and to fix the problem with your you,” he says.

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And if you believe the credit reporting mistake has hurt you financially, it’s helpful to try to document and quantify any financial damages or lost opportunities, Ha-Redeye notes.

From her home on Georgian Bay, though, Monaghan says she’s relieved her credit score odyssey is finally over.

“The mistake has held me captive,” she said via email. Now, though, she wrote, “I feel freed.”

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