Credit Score in Canada – Tips and Advice
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
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