Archive for Category 'Credit repair', page 3

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.

Question: My husband lost his job last year and we were unable to meet our financial obligations. We had wanted to do a debt proposal but that was refused as we did not have the income to do that. We will be discharged in less than 2 months and since my husband has moved across the country (Canada), and is earning an excellent salary and I earn a decent salary. What is the best way for us to rebuild our credit so that we can borrow again, be in for a home or newer car?

Answer: The best way to rebuild credit after personal bankruptcy is by saving money.  Once your bankruptcy is over, if you have a good job and a down payment or a security deposit it is relatively easy to finance a car, or even a home.  The larger the down payment, the better the interest rate, so we recommend you save as much as possible before making that purchase.

Another great way to start the credit repair process is with a secured visa card.  You give Visa $1,000 as a security deposit, and they give you a credit card with a $1,000 limit.  It appears on your credit report as a normal credit card, which also helps rebuild and repair your credit.

Question: I HAVE BEEN TURNED DOWN FOR LAONS AND CREDIT DUE TO MY BANKURPTCY IN 2002. I WAS INFORMED IF THIS WAS NOT ON MY CREDIT REPORT I COUKD RECEIVE THE LOAN FOR MY BUS. HOW DO I GET IT OFF

Answer: According to Equifax, a bankruptcy remains on your credit report for six years after the date of discharge.  It will be automatically removed after six years, but will not be removed before that date.  In most cases if you can provide some security for the loan (perhaps the assets you will be buying for your business) or have a co-signer, it is not unusual for a lender to lend money even with a bankruptcy on your credit report.

Question: how long does it take to repair your credit?

Answer: It depends on what needs to be repaired.  If you were one month late paying your hydro bill, once you get caught up and continue paying on time, your credit score goes back to normal fairly quickly.

However, if you declare personal personal bankruptcy, the bankruptcy will remain on your credit report for six years after the date of discharge in most jurisdictions.  After a bankruptcy, to repair your credit you need to begin saving money for down payments when you are able to borrow again.  Over time, your credit will gradually improve.  In fact, many people are able to finance a car or even a house a year or two after their bankruptcy ends, if they have a sufficient down payment, so the speed at which you repair your credit is largely up to you.

Question: What are the rights of a consumer when a creditor has written off a 7 year old debt, then sells the bad debt to another organization similar to a credit agency ?

Answer: Once you owe a debt, the debt never goes away.  In most places in North America this is no statute of limitations on a debt.  In practice, if a creditor leaves you alone for 7 years, it is difficult for them to pursue you later, because if they went to court to try to collect a debt that old, the court may wonder why they waited so long.

However, if the creditor or the collection agency is pursuing you, you will either need to work out a plan directly with them, or file a proposal or a bankruptcy, or work with a credit counselor, to deal with the debt.

Question: I have large credit card debt I am behind 3 months what is the differnce of paying it to the card company or to ther collection agency? If one is worse than the other why? And the long term effects like my credit score?

Answer: Your credit report shows your payment history, so if you are three months behind, you would normally be rated as an R4 (R1 means you are up to date; 3 months behind is an R4).  Therefore whether you pay the credit card company or the collection agency typically does not matter; you are still an R4.

In some cases the credit card company will not accept your payment; once they turn it over to a collection agency, only the collection agency will accept payment.

If collection agents are calling and if you don’t have the money to pay them, it may be time to deal with the problem once and for all, perhaps by filing a consumer proposal.

Personal bankruptcy should be treated as the final option, the last resort to deal with money problems.

If you have made a household budget to understand where your money goes each month, and if you don’t qualify for a debt consolidation loan, and if you have explored credit counselling and a debt management planand if you have looked into a consumer proposal for Canadians, or for Americans a Chapter 13 Bankruptcy , and none of those options will work, personal bankruptcy may be the correct option for you.

The key is to evaluate all other options, and then meet with a licensed bankruptcy trustee to review your options in deal. A free initial consultation will help you make an informed decision about whether or not bankruptcy is the correct option for you.

Welcome to the new Money Problems Blog. The www.moneyproblems.ca web site started in 1999 to provide free information about how to deal with your money problems, and now receives tens of thousands of visitors every month from Canada and the United States.

Our site is based in Canada, and contains extensive listings of local credit counsellors, bankruptcy trustees and mortgage brokers.

While www.moneyproblems.ca has helped a lot of people, we have also realized that many people want to ask an anonymous question before contacting an advisor, or simply want to read constantly updated information. That’s why we have introduced the Money Problems Blog, where you can read articles written by our team of experts, and even ask questions.

We have organized the Blog into categories, so simply click on a category to find articles and questions and answers about Budgeting, Debt Consolidation, Bankruptcy Alternatives (including credit counseling, consumer proposals for Canadians and Chapter 13 bankruptcy for Americans), Credit Repair, and Personal Bankruptcy.

Thanks for reading, and we look forward to providing information and answering your questions about how to solve your money problems.