Credit counselling problems..
Question: My fiance had a credit card in his youth that went unpaid, and he went to credit counselling to pay off a $1,500 debt. He has paid it off ahead of schedule with a perfect repayment history.
We are now applying for a car loan and have been denied. They said his credit history said he has declared bankruptcy for $1,500. We knew his use of credit counselling would prove difficult to establish new credit, but why are they saying this debt repayment program is the same as bankruptcy?
His counsellor said his debt repayment would appear on his record for two years, however the car dealership says it is bankruptcy and it will appear for 7 years.. We’re confused..
Answer: It appears that everyone is confused. According to Equifax, the largest credit bureau in North America, a debt management plan through a credit counsellor remains on your credit report for 3 years after the payments are completed. A bankruptcy appears for six years after the date of discharge. We suggest you get a copy of the credit report to see what’s actually reported on it; it appears that the car dealership is either reading the credit report incorrectly, or the information was reported incorrectly.