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My Credit Score Canada

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What to do with a bad credit score?

Question: I am purchasing a house and have two recent hits on my credit (past due 30 days 2 months in a row – pretty much my fault actually). Is there any reliable and quick way to boost my credit in a week? Even if it costs a bit? Answer: I doubt you are going to be able to fix your credit in a week. Just consider paperwork and processing of new information to start with. That right there is longer than a week in most cases. Let us talk a little about how credit scores work to begin with.

I personally belong to a service called CreditInform. Every 3 months they send me a copy of my credit report broken down. I started this a couple of years ago when I wanted to fix/build my credit score up. I HIGHLY recommend them if you would like to track and raise your score. In 2 years, I have raised my credit score over 300 points.

There are three main credit bureaus:

Equifax, based in Atlanta, Georgia
Experian, based in Allen, Texas
TransUnion, based in Springfield, Pennsylvania.

These three agencies are going to be where you file any disputes regarding your credit and who reports information to lenders when you apply for credit. These ?Big 3? do not exchange info with each other, so, depending on whom the lender pulls information from, they can get a different picture of your credit history, giving you a different credit score. Credit Inform pulls all three into one report to give you the most accurate picture of your credit. I chose to use them for that reason alone in the beginning.

How long do things remain on your credit report? Public records and collection items stay on your report for seven years with the exception of bankruptcies, which stay on for ten years, except successfully completed Chapter 13 bankruptcies, which are also removed after seven years.

Unpaid tax liens remain for 15 years.

Positive information remains indefinitely, although agencies can remove it after seven years.

Inquiries remain for two years.

If there is inaccurate information on your credit report, you can dispute it. This process can take up to 30 days for the initial dispute. Here is a Sample Dispute Letter that you can use to dispute charges

Credit scores range from 350 to 850.
350-475 is considered Very Weak
475-550 ? Weak
550-630 ? Fair
630-740 ? Good
740-850 ? Excellent

As far as your late payments, here is what Credit Inform has to say about that

Some cases of late payments are worse than others. If you have not been late with any payments recently, lenders may think you are responsible and do not (or will no longer) miss payments. Lenders realize that many people occasionally pay late. Therefore, being late with a single payment is typically not as harmful as being late with two or more consecutive payments. Similarly, being late on many accounts is typically worse than being late on one. In addition, lenders may view late payments as a more serious problem if you have collection accounts or negative public records such as bankruptcies or court judgments. These types of credit records indicate a pattern of credit problems. Finally, it may not be as harmful to be late with your payments if the past due balances are small, because lenders stand to lose less money if they remain unpaid.
Also, from another site about late payments

?Your payment history makes up 35% of your total credit score. Your recent payment history will carry much more weight than what happened five years ago. Missing just one months? payment on anything can knock 50 to 100 points off your credit score. Paying your bills on time is a single best way to start rebuilding your credit rating and raise credit score for you.

I recommend in order to raise your score overall (and it will take longer than a week) to get a copy of your credit report from all three major Agencies and check it over. Are all of your closed accounts actually closed? Are all of your payments reported correctly? Are the accounts all yours? Credit Inform also has a tool where you can propose a scenario and it tells you how that will affect your credit score. IE: Paying everything on time for 6 months, applying for a loan, etc.

You also have to be aware that some Credit Repair places are scams.

??Credit repair schemes are a big problem for consumers,? said Eileen Harrington, Deputy Director of the FTC?s Bureau of Consumer Protection. ? Credit repair promoters generally charge hundreds of dollars, but do not deliver on their claims. The fact is, they cannot. No one can legally remove accurate and timely information from your credit report.

Bad information cannot be removed from a credit report if it is legitimate information. If in the process of trying to raise your score, you encounter anyone who says they can get rid of info on your report that is legit info (IE your 2 late payments) its a SCAM. It is also ILLEGAL.


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Overburdened with Debt?

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Take control of your financial future with comprehensive, 100% confidential credit and debt management counselling and education from an agency that you can trust.

At CreditSolutions.ca we specialize in helping our clients to deal with Canadian debt!

Solutions Credit Counselling Service Inc.™ (Creditsolutions.ca) is a licensed, bonded, independent credit counselling agency that works for you, not your creditors.  We are 100% Canadian owned and operated, and the only independent agency of our kind in Canada.

Solutions Credit Counselling Service Inc.™ (Creditsolutions.ca) is the Canadian Consumer’s best source for credit education, counselling and debt management solutions in Canada today.

We can eliminate debt collection calls, help you manage your financial commitments without taking out a consolidation loan, and develop acceptable alternatives to bankruptcy, allowing you to keep your assets and manage your debt safely.

Our professional highly-trained Credit Education Specialists™ — government licensed and federally registered insolvency counsellors—will work with you to develop simple, customized programs to reduce your debt, relieve your stress, improve your cash flow and get you back on the road to financial health.

We offer

  • Free debt counselling
  • Debtors Assistance – learn how to increase your cash flow
  • Simple, sound, credit and debt management advice tailored to your needs
  • Debt Managment Programs (DMPs)
  • Orderly repayment of debts
  • Elimination of collection calls from creditors and debt collectors
  • Structured repayment programs (DMPs) and no-fee bankruptcy referrals
  • Financial literacy workshops and seminars
  • Bankruptcy Insolvency Act (BIA) insolvency counselling

We understand the importance of choosing the right credit counsellor; your emotional and financial well-being depends on it. Please take the time to learn more about our services, expertise and code of ethics.

When you’re ready, contact us for a free, no obligation, 100% confidential consultation.You’ll obtain professional credit and debt assistance from the privacy and convenience of your own home.

Click here to get help and advice…Pay your creditors now!


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Car Loans After Bankruptcy

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Auto Source Finances Trustees’ can answer a number of questions people often ask relate to credit repair after bankruptcy: I filed for personal bankruptcy in Canada – for how long will it stay on my credit report? Can I somehow repair my credit after filing for bankruptcy? Is it possible to erase bad credit history?

Your credit rating determines whether or not you will be able to get a loan in the future. A bad credit report might mean that you will not be able to get a car loan, mortgage, or debt consolidation loan.

A bad mark on your credit report – such as filing bankruptcy – will (except in very special situations) remain on your credit record a maximum of six years. After that, the information is dropped from your record. Unless it’s a double bankruptcy which will then stay on your credit report for 12 years.

Is credit repair after bankruptcy a possibility or you have to wait the six years to pass for the record to get cleaned? Unfortunately, you can’t totally erase your bad credit,

Because you can’t remove bankruptcy from your report – but there are things that you can do to improve your credit history. Suggestions on how you can repair your bad credit follow.

How to repair bad credit – the six steps plan

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

  1. Review your credit report

Review your credit report for any errors or negative comments.

An error may include a debt that you have already repaid

A negative comment may result from a department store credit card that you stopped using ten years ago, if it had a $10 balance owing, it may still show up on your credit report.

  1. 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.

  1. Repair Information on your credit report

If you owe a creditor $10 and they have filed a negative credit report with the credit bureau, repay the creditor and ask the creditor to note on your credit report that the debt has been paid. If a debt legally owes, the debt must be paid or discharged before it can show on your credit report as being paid or discharged.

  1. Pay off your 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 applying for a new loan.

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 household budgeting plan should include specific repayment amounts for each of your debts.

  1. Take Some 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 consumer credit counselling and a debt management plan. For professional advice and further assistance, please contact a debt management consultant or a licensed bankruptcy trustee.

To conclude, you can’t erase a bad credit with a personal bankruptcy note on it, but partial credit repair after bankruptcy and credit improvement in general is possible – and it is in your hands. If you want to obtain a car loan you can actually start rebuilding your credit prior to discharge of your bankruptcy.

Auto Source Finance works with VFC who will grant you a car loan even while you’re in bankruptcy. You can start building your new credit right away. You may have to pay a large interest rate in the beginning but your credit is worth the interest. After you have made 10-12 payments on time Auto Source will help you reduce your interest rate to prime lending rates. So if you think you cannot get a Car because you are bankrupt or have no credit or bad credit talk with Auto Source Financial and start building your credit Now!


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OPD’s Demise in BC

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Doug and Sue are faced with a financial crisis and are determined to do what ever it takes to gain control over their debts.

They want to pay their creditors and are in my office exploring their financial options. The couple has heard of a program called Orderly Payment of Debts (OPD) and want to know how it can be of help to them.

Unfortunately, the OPD program has become a victim of B.C. government cuts.The OPD program has provided more debtors with unbiased financial information than any other financial service to date. The program’s closure will cast thousands of poor individuals and vulnerable families to the yellow pages.

These people will soon be phoning trustees or credit counsellors, only to find that there is little in the way of services available to them.

OPD has been in existence since the late 1960s. In 1975, as a loans officer at Vancouver City Savings Credit Union, I made what would be the first of many referrals to the counsellors at OPD. For a period of 16 years, the OPD program was essentially the only credit-counselling service available to debtors.

As the national consumer debt expanded from $41 billion in 1980 to over $100 billion in 1990, B.C. could not keep up with the demand for alternatives to bankruptcy. Private-sector credit counselling services began appearing and have worked alongside the OPD program ever since. With the changes to the Bankruptcy and Insolvency Act in 1992, the Trustees in Bankruptcy began offering consumer proposals for debtors.

There have been growing pains with private-sector competition in the industry, as well as the occasional belief that the OPD program was “stealing business” away from both trustees and credit-counselling companies. However, there is no financial profit to be found in OPD’s activities.

In the beginning, OPD offered a service to the over-committed debtor where the program received little or zero profit. In recent years OPD has responded to newer casualties of the credit society — such as the student loan crisis, leaky condos and growing tax liabilities for individuals and families.

Once again, there is little financial profit to be uncovered.

In 1998, the OPD program split away from the consumer portfolio and the regulatory function of debt collection and credit reporting. OPD began to focus on separating families and providing mediation and counselling services at no cost to the debtor, creditor, or the family court. This initiative served to place the OPD program even farther away from the insolvency business and in the heart of another great social tragedy, the struggling family unit.

Once again, there is little, if any money to be made here.

With the closure of the OPD program, our industry will quickly discover how many free services were available in the past to people who are financially challenged.

Often people with severe financial problems are afraid and angry, and at times they can be belligerent. Starting April 30, there is no longer a destination to refer these unfortunate people to.

What is the cost of closing the OPD program?
The closure of the OPD program will increase credit counsellor’s costs, as many people turn to us for financial guidance and support.

Secondly, credit counsellors will lack a long-standing valuable resource, where, if all else failed, they could always send clients down to OPD.

Thirdly, there will be an increase in bankruptcy assignments for the poor and financially vulnerable. Possibly in the future, there may even be a need to create a new type of bankruptcy assignment to accommodate those who lack the ability to pay the bankruptcy fees.

Ministry statistics over the years have clearly established that the vast majority of clients for the OPD program need access to credit information. This information includes what constitutes harassment under the Debt Collection Act, what constitutes a proper and improper seizure of assets, what credit ratings are and how long will it affect the debtor, and many more questions and issues.

The OPD program has always provided the consumer with a great deal of information regarding bankruptcy itself, that will now undoubtedly come to credit counsellors and bankruptcy trustees.

Yes there may be new opportunities, but by and large, OPD has been a unique and special service in BC.

I am not alone as I mourn the death of the OPD in B.C. On behalf of the hundreds of clients I have referred to OPD over the last 27 years, I wish to extend a special thank you to Mr. Doug Welbanks, director of the Debtors Assistance Program and his excellent staff – you will be missed.

Margaret H. Johnson ACE, RQIC, has over 35 years of financial industry experience in both lending and collecting. She is an Accredited Insolvency Counsellor, Registered by Industry Canada


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