Archive for Category 'Credit repair', page 2

Question: I recently settled a debt with a credit card company by offering to settle the debt for 50%. The reason I could no longer continue with the regular payments was because I has an accident and I am now on CPP disability reducing my income by 60%.
I received a small lump sum from my insurance. This was were I got the money to cover the settlement amount.

How can I add a qualifying statement to my credit file to explain the circumstances surrounding the negative information in my file?

Answer: You can contact the credit bureaus directly to update your file.  For example, you can complete the Equifax credit report update form to add additional information to your file.

Question: I have made a informal proposal which was accepted. I paid my creditor 50% of the outstanding debt to clear the debt. If in a year or two things get better for me financially, will I be able to apply for a credit card again, or will I have to wait until it no longer appears on my report?

Answer: You can apply for credit again now.  However, your chances of obtaining credit at a reasonable interest rate increase with the passage of time, and as you take other steps to improve your credit rating (such as saving money, paying monthly bills on time, and having a good job).

Question: when are you clear from bankruptcy? When is the seven years up? Does it count from when you file for bankruptcy or does it count form when you are discharged.

Answer: The minimum period that a bankruptcy can last in Canada is nine months, after which you may be discharged from bankruptcy, meaning that your debts are eliminated.  There will be a note that will remain on your credit report for a further six years after the date of discharge indicating that you had filed bankruptcy.

Question: If an outstanding payment i owe is sent to a collection agency, will this affect my credit rating in any way?

Answer: If your account has been turned over to a collection agency, your credit has already been affected, since accounts generally only get sent to a collection agency if they are in arrears.  Once the payment is made, that will also show on your credit report, so your credit rating will then gradually improve over time.

Question: I read that credit counselling and the proposal have the same effect from the credit report point of view, so why opt for credit counselling and pay off all amount owed instead of a consumer proposal where you can pay 60-70% of amount owed and be debt free. Thanks

Answer: You are correct. According to Equifax, both a debt management plan and a consumer proposal remain on your credit report from the date of the last payment.

Many people opt for a credit counselling debt management plan because the do not want to include all of their debts in the plan; in a consumer proposal, you must include all of your unsecured creditors (you can’t pick and choose).

You are correct that in a debt management plan your debts are typically repaid in full, whereas in a typical consumer proposal you pay less than the full amount owing.  The other big advantage of a consumer proposal is that it is legal binding; once it has been approved by the creditors, they cannot change their mind.

For more information, contact a credit counsellor or a proposal administrator.

Question: I was wondering if filing for personal bankruptcy in Canada would affect my credit in the USA?

Answer: Generally, no, Canadian credit information, including bankruptcy, does not appear on your credit report in the USA.

Question: how long do you have to wait before applying for a mortgage after personal bankruptcy?

Answer: You can apply for a mortgage anytime, even while you are still bankrupt (provided that you disclose to the lender that you are bankrupt).  However, it is very difficult to qualify for a new mortgage while you are bankrupt.  Your chances of being approved for a new mortgage increase as time passes after you are discharged from bankruptcy.  In other words, you have a better chance of getting a mortgage four years after you are discharged than you have one year after being discharged.

To increase your chances of qualifying, you want as high a down payment as possible.  You can consult a mortgage broker for more information.

Question: I had a credit card got to collections after not making any payments for three months. Once they got a hold of me, I payed off the credit card in full, by withdrawling money from a mutual fund. How was my credit score affected, and for how long will it be on my credit report?

Answer: Your credit report typically shows the payment history on your account for the past 24 months.  Each month is represented by a number, between 1 and 9, indicating your payment history.  For example, if your payments were current for the last six months, your credit report would show 111111.  If you fell one month behind last month, your credit report would show 211111.  In your case you were three months behind, and then you paid in full, so if you paid it in full two months ago, your credit report would show 114321 (the first two 1′s show that you have been current (paid in full) for the last two months; the 4 shows that you were 3 months behind, the 3 shows that four months ago you were 2 months behind, and so on.

Your credit will probably not be damaged for very long, since your payments are now up to date.  More information can be found on the Equifax web site.

Question: Hi! I filed a bankruptcy in Quebec in may 2005. I moved in Ontario last november. I currently live with roommates and I want my own apartment for april 1st. I’ve been in apartment for 5 and a half years now and I never missed a payment. I applied on several apartments in Toronto and I’ve been refused everytime because of the credit check. Even if I earn 37,000$/year and I have excellent references, it doesnt seem to make a difference with landlords. I need to find an apartment now and I can’t get one.
What should I do?

Answer: Unfortunately many landlords will not rent to you if there is anything negative on your credit report, including a past bankruptcy.  You have two choices.

First, talk to the landlord and plead your case: advise them that you haven’t missed a rent payment in five years, and tell them that you have your deposit for first and last month’s rent.

If that doesn’t work, you may need to rent from a landlord that doesn’t do credit checks, so instead of renting in a big apartment building owned by a corporation, try to rent a basement apartment owned by the homeowner who is probably more interested in first and last month’s rent than they are in your credit report.

A bankruptcy is automatically removed from your credit report six years after you are discharged, so your problem should resolve itself in the next year or two in any event.

Question: I recently was at my bank and through a credit check they told me I had a collections record. When I ran and Equfax report and did some research I was informed it was for an old telephone account I had in a previous province. When I re-opened an account with the same company in the new province 5 months later the system did not alert them that I had monies outstanding. I was completely unaware of the past due account as the company sent letters to the address I told them I was moving from when I closed the account. I am now trying to get copies of the old billing statements and the letters that were sent to me that I never received. I have contacted the collections agency and they said they do not have that info and I have contacted the telephone company and they said legally they do not have to provide me with the information. How can I get this information or is it unattainable? I want to know what I was being charged for and proof that effort was made to contact me. Also now that this is on my credit report, will it stay for six years since I made the payment (last week) or for six years since the account was in default (2003)? The company held on to this for three years – does my credit report have to hold onto something that happened 3 years ago plus six years on my report for a total of nine years?? Help! Thank you!!!

Answer: Once something appears on your credit report, it typically stays for six years from the date of last activity, not from when it first appeared.

To have this removed from your credit report, you will probably either need to have a lawyer threaten legal action against the telephone company or the collection agency for not providing you with proof that you owed the money.  Your other alternative would be to contact the Ministry of Consumer Affairs in your province to see if they have a procedure that you can follow to get this corrected.

Since you have now paid the item, and since it was a relatively small dollar amount, it will probably not have a significant impact on your credit report in the future.