The two largest credit-reporting agencies in Canada are Equifax and TransUnion. These Agencies are a repository of consumer credit information. They do not make credit decisions, rate consumers, or grant credit.The Agencies receive information about you directly from your credit grantor, which is based solely on that grantor’s experience with you.This information is then compiled by the Agency in a credit report that is made available to the “members” of the credit granting agency or you, the debtor.A copy of your credit report is free of charge if mailed to you via Canada Post, but there is a charge (approx. $15) if requested over the Internet.
What if the information on my credit report is wrong?
It is recommended that you check your credit files at least every two years to ensure that the information is accurate and that there have not been any unauthorized inquiries.If you find that there are inaccuracies or errors, there is a dispute process within the Credit Reporting Agencies and they are required under law to investigate on your behalf and make corrections where necessary.
Credit Repair Scams
Beware of advertisements or individuals who offer to “fix your credit rating” for a fee – especially if that fee is payable up front.In reality, no one has the power to change or erase accurate information in a consumer’s file. The “repair” to an individuals credit file comes over time with the proper use of credit, and is based on a debtor’s behavior. Those who offer a “quick fix” are trying to take advantage of debtors who are unaware of the credit system and how it works.
How do I improve my credit rating?
The first step is to ensure that the information in your credit report is accurate.After that, the only way to improve your credit report is to use credit wisely.Wise use of credit includes;
- Do not apply for a myriad of credit sources; limit yourself to two credit cards with small credit limits.
- Pay your bills on time. Work with your creditors to allow time to pass to show that your payment habits have improved.
- Be prepared to show stability of employment and residence.Creditors want to know that you have a reliable source of income and that they can easily contact you if necessary.
- Get a secured credit card and pay the balance off every month.
- Keep an emergency store of cash to be used to pay your living expenses if something goes seriously wrong with your income sources.
- Communication.If you run into problems, talk to your creditors and tell them that you intend to pay your bills, but you need a bit of leeway.
- Consider that the alternative, bankruptcy, may well permit you to recover a good credit rating much faster than credit counseling (with someone who is just a credit counselor).Negative credit items, including records, remain on your credit report up to seven years.
Dealing with Debt Collectors
If you are having debt problems, a collector or collection agency can contact you on behalf of their client in an attempt to get payments from you.Being behind in your payments does not mean that the lender or its collection agent has the right to harass you under law.
For an outline of your rights and duties in BC, refer to the BC Business Practices and Consumer Protection Authority as well at the BC Debt Collection Act.
Bankruptcy can be prevented if you follow up on your credit reports. It is important that you monitor the entries going into Equifax and TransUnion and ensure they are accurate. Talking to a LIT bankruptcy trustee, a debt restructuring expert, you will discover ways you can not only pay your debts off, but recover your financial freedom. Trustee Colleen Craig from Victoria BC, will look at all of your options and help you through these tough financial times! Contact us today and learn how you can avoid bankruptcy!