Credit Score in Canada – Tips and Advice

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credit card payment, credit rating score, credit score, major credit bureaus, negative comments

Well, for whatever reason that has happened, your bills got out of hand, you have missed payments or carrying a large amount of debt and now it’s affected his ability to obtain financing.

Plain and simple, bad credit affects your credit rating / score (FICO) and its ability to obtain financing. The impact of bad credit can range from not obtaining the loan or credit card to have to pay interest rates well above what you would see if there was a good credit.

OK, enough about the past, what can you do to repair your credit.

1) Obtain a copy of your current credit report.

In Canada, there are two major credit bureaus

Equifax 1-800-465-7166
Trans Union 1-800-888-4213

Of the two agencies would be probably the most recognized Equifax.

2) Check your credit report.

Yes, mistakes are made. bad credit in the past have not been seized but they have already been paid.
There may also be comments, which are considered negative. This is your opportunity to respond to those comments.
If you owe money to a creditor, the creditor to pay and asked to remove the credit, including negative comments from his report.

3) Pay the debt.

If you have a significant amount of debt, this can also affect your ability to obtain credit. Some lenders have a problem with the extension of credit if they see a significant amount of debt, even though all payments have been made. The general consensus is to keep debt below 30% of your credit limit.
Pay off debt with higher interest rates first.

4) Take out a loan or credit card.

So, get a loan or a credit card and buy something you know you can pay at very short notice. If your credit is poor, you may have to pay a higher interest rate, but if you pay the debt quickly, the interest charged will be minimal.
If you cannot get a loan, ask a family member or friend to co-sign for a loan or credit card. Payment of debt in a small loan or credit card will help speed their ability to repair your credit.

5) Call the lender.

If you cannot make their minimum payments, consider calling the lender and explain your situation. Many lenders look favourably on those who take the initiative to deal with their debts.

Unless you win the lottery, everyone eventually need credit and it is too late to deal with bad credit where credit is needed. Lenders base much of their lending decisions in their past history. To repay the debt on the day before the search of credit is not good.

If you have bad credit, not too overwhelmed, take each debt one step at a time. Pay the debt with higher interest rates first class and go from there. Showing their willingness and ability to deal with past debt problems goes a long way to show lenders that you are worthy of consideration.

This is just information sharing & not legal advice, please consult right legal professional for the help.

Did you find this information helpful? If so, check out my blog where I post articles I find to be relevant to how to rebuild your credit.

 

Vijay Gandhi, MBF,B.Sc. Mortgage Agent
Licence #: M10001947

CENTUM Metrocapp Wealth Solutions Inc.
Licence #: 12147
716 Gordon Baker Road Unit #204A
Toronto, ON M2H 3B4

C. 647.267.6338
F. 888.813.9403
E. vijay_gandhi@centum.ca

To Rebuild Your Credit Follow These Steps.

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credit, credit bureau, Credit Rebuilding, creditor, debt consolidation loan, loan mortgage, negative comments

Credit Rebuilding

To Rebuild Your Credit Follow These Steps.

Your credit rating determines whether or not you will be able to get a loan in the future. A bad credit report may mean that you will not be able to get a car loan, mortgage, or debt consolidation loan.
If you want to obtain a loan in the future, start now to build or improve your credit rating, by following these steps:
Note: There are companies that promise to repair your credit; some are scams. Click here for more information on credit card repair company scams.

1) Get a credit report.

First, you need to do a credit check on yourself. In most cases you can obtain your own credit report for free, or for a nominal charge. There are two main credit bureaus in Canada: Equifax and Trans Union. Look in your phone book for the location nearest you, or call their main offices at:
Equifax 1-800-846-5279 or 1-866-322-3162 Trans Union 1-800-663-9980.

2) Review your credit report.

When you get your credit report, do a self credit check by reviewing your credit report to determine if it contains any errors or negative comments.
An error may include a debt that you have already repaid (see section 3 below). A negative comment may result from a department store credit card that you stopped using ten years ago, if it had a balance owing, it may still show up on your credit report (see section 4 below).

3) Correct any errors on your credit report.

If you find an error, contact the credit bureau and offer proof that you do not owe the money. You may need a letter from the creditor indicating the payments were made, or you may provide cancelled cheques to indicate payments were received.
You may also send a letter to the credit bureau explaining your side of the story; your comments can be attached to your credit report.

4) Repair negative information on your credit report.

If you owe a creditor and they have filed a negative credit report with the credit bureau, repay the creditor and ask the creditor to remove the negative credit report from your credit record—and ask for proof. If a debt legally owes, the debt must be paid or discharged before it can be removed from your credit report.

5) Pay off debt!

Even if your credit report indicates that you have made all of your regular monthly payments, a potential lender may look unfavourably on high levels of debt. The solution is to pay off as much of your existing debt as possible before we recommend that you pay off your highest interest debts first, so pay the 18% interest credit card off first, and then repay the 16% interest credit card.
The lower your debt, the easier it will be to obtain a loan. Your monthly budget should include specific repayment amounts for each of your debts.

6) Take other action.

If you have more debt than you can possibly repay, your credit report will only improve by formally dealing with your debts. You may need to file a formal proposal to your creditors, or consider a debt management plan.

in short:

First things first, to stabilize its budget! Can not think of rebuilding your credit if they have not stopped the bleeding! Most people with bad credit have too much debt to rebuild their credit. Your first goal should be to lower your monthly payment of a sum. You can do this in many ways: the consolidation of your debts, contact your creditors and negotiate a lower monthly payment and, finally, although you should have a look at its financial advisor current financial situation before you do, go to bankruptcy.

Once you have stabilized your budget, you will have to do is get a new loan. This is important because it shows on your credit report that it has obtained a new loan by consolidating your debts / negotiated with creditors / insolvency. In essence, this is your second chance. If you can get a credit card and use it wisely from now on, you have taken the first step in rebuilding your credit. Your best bet would guaranteed credit cards or credit cards department store.

After that, if your budget allows, get a car loan or a small personal loan. I advise you to arrive between 2 and 3 financial commitments, and that rebuilding your credit faster. If your budget is too tight to get another loan, keep the personal loan from your bank account and pay the monthly payments. In this way you’re not really getting into more debt, you just pay the interest of banks to rebuild their credit score. Avoid taking a small loan and pay it to the end of a month, as this will have minimal impact on your credit score. Banks want to know if you can handle a loan, if you can not hold on to their money for 30 days!

Did you find this information helpful? If so, check out my blog where I post articles I find to be relevant to how to rebuild your credit.

source: http://www.creditxpert.ca/index.php?option=com_content&view=article&id=71&Itemid=162

Vijay Gandhi, MBF,B.Sc. Mortgage Agent
Licence #: M10001947

CENTUM Metrocapp Wealth Solutions Inc.
Licence #: 12147
716 Gordon Baker Road Unit #204A
Toronto, ON M2H 3B4

C. 647.267.6338
F. 888.813.9403
E. vijay_gandhi@centum.ca