Archive for Category 'credit report'

Question: How long does a consumer proposal affect your credit rating after it has been paid off?

Answer: According to Equifax, a consumer proposal remains on your credit report for three years after you finish making all payments.

Question: I have recently been trying to re-establish my credit since I have returned to a secured field of employment that would allow me to do so. I have previously started establishing credit by having a visa, a revolving store account and a cell phone contract that was obtained in 2004. All have been sent to collections, but have recently been paid in full as I am in a position to borrow again. I have met with several lenders who could not give me the proper advice needed in order to obtain credit from their institution. They would rather treat it as a gamble and advise me to “just apply and see what happens.” Once I have applied and have been denied, even with a down payment the lender would give me advice on what I needed to do in order to obtain credit. I have conducted research into the issues i have encountered and have been monitoring my credit report and score in an effort to bring my file to an acceptable lending position. Even with doing so and having my fico score start at 630ish with nothing owing and plummet to 550 from the numerous inquires then return to 600 and plummet once again due to the inquiries and false advice received from the lending institutions every time they would tell me I would be approved for the loan. Now that all three bills have been paid in full for over six months the lending institutions are now telling me that I am a credit hunter and are refusing my application as a result of the previous inquiries. I currently have a secured credit card and a loan from well fargos that are relatively new. I was wondering if there was anything i could do to have the inquiries removed from the bureau as the majority of them are only there as the banks stated I would be approved if I complied with their request’s but only to be denied by them again? I am starting to think that it might have been more efficient to claim bankruptcy instead of trying to repair the credit on my own.
Thanks

Answer: Your question raises some interesting issues.

If you have a debt that goes into default, and then at some later point you eventually repay it, the notice of the default still appears on your credit report.  According to Equifax, information about debts you pay late remains on your credit report for six years, which is the same period that information regarding bankruptcy appears.  Credit inquiries remain on your credit report for three years.  So yes, you may be correct that in hindsight a bankruptcy may have been a viable option for you.

It should also be pointed out that since the market crash back in late 2008, all banks have tightened up their lending practices.  It has become much more difficult to borrow now, even if your credit isn’t bad.  That could also be a factor in your inability to borrow.

Your best option is probably to only borrow when you are highly likely that you will get the loan.  For example, perhaps you start a small RRSP at your bank, and then apply for an RRSP loan for a small amount.  Since the loan will be re-invested in your RRSP at the bank, it is more likely that the bank will approve the loan.  That will then give you a loan approval on your credit report, which should improve your credit score in the future.

Some other tips:

First, avoid credit repair scams.  There are lots of people who will promise to fix your credit, but there are no magic solutions, so if it seems to good to be true, it probably is.

Second, the best way to repair your credit is to have money in the bank, so work on saving money.  That money can then become a down payment or a security deposit on a future loan.

Third, don’t apply for lots of loans.  As you have discovered, every time you are rejected your credit score on your credit report drops.

Finally, keep all of your current bills up to date.  Don’t be late with your hydro bill, or any other bill, as that will negatively impact your credit.

Credit repair doesn’t happen overnight, so take your time and allow the gradual improvements to improve your credit score.

Question: I have a consumer proposal which I am half way through paying off. I got a copy of my credit bureau because I am trying to qualify for a mortgage. When I pulled my bureau I noticed that the mortgage company had hit my bureau very heavily and it dropped my score a lot. I also noticed that two of the creditors that are included in my proposal are on my bureau but no indication is there stating that the accounts are being paid off.

If these two creditors are included in the consumer proposal and if they are to stay on my bureau should they not at least say that they are being paid?

What can I do about the hits to my bureau from the mortgage company? (in some cases it shows it being hit 3 times in one day)

Should the trustee for my consumer proposal be the one to report to equifax about the two creditors and make the admendments?

I don’t know if I am suppose to go to the creditors or through the trustee to get these items fixed. I sent in paperwork to Equifax months ago and nothing has changed.

Can you help me … I am sure I am not the ony one with this problem.

Thanks

Answer:  Our advice to anyone who is currently in a consumer proposal or a bankruptcy is always to deal directly with your trustee.  Only they are fully aware of your circumstances.  On this money problems web site we can only give you generic answers, that may not match exactly with your situation, since we don’t know all of the facts.

Here is the generic answer:  Your trustee reports your consumer proposal to the Office of the Superintendent of Bankruptcy, and they in turn report it to Equifax and Trans Union.  Each individual creditor also reports to the credit reporting agencies.   It would appear that the creditors have not accurately reported the proposal.

We suggest the following approach:

First, contact each creditor and request that they update your credit report to show that their debt is included in your proposal.

Second, contact both credit bureaus again and ask them to correct the information.

Finally, talk to the mortgage company and ask them to notify the credit bureaus that they erroneously hit your credit report three times in one day.

We should also note that given the current credit crisis it is currently very difficult to qualify for a new mortgage while you are still in a consumer proposal, so it may be necessary to wait until you have completed your proposal to attempt to get a mortgage.

Question: how does credit counselling affect your credit bureau vs 4-5 months late payment or a consumer proposal?

Answer: According to Equifax, a consumer proposal and a credit counselling debt management plan are both reported exactly the same: they appear on your credit report for three years after the proposal or debt management plan is completed, and you are coded as an R7.  You can read more on the Equifax website.  If you are late 5 months with a payment, you will probably be coded as an R6, so that is almost identical to a consumer proposal and a debt management plan.

Question: I’m wondering how to find out who i owe money to(collections agencies) now that i have the money to pay them off.

Answer: To find out who you owe, contact the credit bureau.  The largest credit bureau is Equifax; here’s a link to the Equifax Credit Report Request Form.  You send them the form, and about ten days later you will get a list of all debts reported to the credit bureau.  You can then contact the creditors to make repayment arrangments.

Question: When I was younger I messed up with credit. I had a join CC and some other department store credit cards that at that time I ended up maxing out and with no income just stopped making payments. That was some 7-8 years ago.

Well things are looking up now, and I want to get my credit back on track. All this time I have still maintained just one credit card that I have kept current without issue. However, on pulling my credit report today I have found 2 collections for the department store ones (CND Tire and Sears) , and one for Capital One credit card, which to my shock is now sitting at just over $11k. The last balance I recalled having on it was for about $7k back in 2003 I think. The other two together amount to $4900.

So I am looking at about a total of $16k in bad debt on my credit against my one credit card that is perfect. This is based on Trans Union info at the moment. Equifax online wouldn’t generate my report right away, so I have to wait till Monday to find out what might be on there.

There is no way I can cover $16K any time soon and I need to get this settled fast. I don\’t want to do a consumer proposal as that is just as bad as declaring bankruptcy with a ding to last 3 years instead of 7, and I don\’t care to get my current good credit card involved.

I have gotten numerous offers from the capital one collection agents to settle on my balance for something like $5000 to clear it.. but to tell you the truth, I don’t trust collection companies. I think I will make that payment and then they will start harrassing me to collect on the rest of the balance.

I currently have about $6000 that I can use to pay down my debts and clean up my credit history. I want to fast track this cleanup though, and would like to know if it isn’t unheard of to contact these people individually who say I owe them and offer them something like $0.40 on the dollar with one single payment and agree to remove it from my credit history, or at least show it as paid. If I get them to agree to this, will they, or do they, usually honor it? Will it show up on my credit history as cleared? Should I get them to send me something in writing to agree to this before I proceed with payments?

After this I guess I will be busy getting secured credit cards and building up more of a positive profile.

My goal is to get this turned around in 6 months. Am I dreaming? Or can it be done?

Answer: The advantage of a consumer proposal is that it’s a legally binding settlement; once accepted, the creditors cannot change their mind later.  However, you are correct, there is a note on your credit report that remains for three years after the proposal is completed.

Another possible option, if you want to propose a lump sum settlement to just the credit cards that are delinquent would be to use a lawyer to negotiate the settlement.  That way you get a legally binding settlement, on terms acceptable to you, with less impact on your credit report.

Question: About 6 months ago I was discharged from a bankruptcy and haven’t done anything yet to re-establish it. I’ve also moved (renting as usual) and changed jobs (different industry) in the last month, so I have no job or residence stability. My bank won’t offer me any sort of credit for another 5 and a half years when the bankruptcy falls off my credit report.

I realize this is the penalty I pay for being relieved of my debts and wasn’t expecting it to be a walk in the park. I’ve learned from my mistakes and have be pretty good about paying my current bills on time to avoid any negative reports on my credit report. But, I don’t make much money and have very little left over after everything is paid. I’m looking for a higher paying job, a extra part-time job, or starting a part time business on the side to make more money.

Short of high-risk (and high-interest) car loans and mortgages, which I may be able to qualify for in the near future is there anything else I can do to re-establish credit? I’m even afraid to obtain a credit report as I’ve heard that will lower my score a few points – and I need all the points I can get right now!

I’ve heard about secured credit cards to repair credit and have seen some mentioned on your website. Money is a bit tight right now, but I hope to be able to save $300 or $500 to start one soon. I’ve heard conflicting opinions on whether or not to get a higher limit – theory being I “could” max out the card at any time and give me a bad debt-to-income ratio. Any ideas on what I can do to re-establish credit soon would be greatly appreciated.

Answer:  The most important method for re-establishing credit after bankruptcy is to save money.  That money can then be used as a down payment for a car, house, or other purchase.

A secured credit card is also generally a good idea.  We suggest you use it, but pay it in full every month.  It shows that you are handling credit wisely, but still have no debt.

As for your credit report,  it is true that if you apply for credit at a lot of places in a short period of time, you will lower your credit score.  However, requesting a copy of your own credit report does not impact on your credit score.

Question: How do I find out who’s got the contract to collect on an old VISA card debt that went to collections a while ago? I’m trying to clear up my credit situation in preparation to buy a house in the next few years, and I defaulted on this VISA, but no longer have the card, account number or anything like that. I now have the means to pay this bill off, but because I moved around a lot while I was a student, I have lost track of the collection agency.

Answer: There are two options.  First, you could phone the bank where you had the credit card.  They should be able to advise you on how to make payments.

Your other option would be to get a copy of your credit report from Equifax; it will list your debts, with contact phone numbers to contact the creditor.

Question: I was contacted by a collection agency to collect a debt that I was totally unaware of and may not be liable for.
I told them I would not discuss any payment arrangements until they could prove that I actually owed any money.
In their preparations of collecting information about the debt, they ran a credit check on my credit report. Are they authorized to do that without my permission?

Answer: No-one is allowed to run a credit check on you without your permission.  However, when you originally applied for the credit, you probably signed a form giving them permission to check your credit.  Of course, if you didn’t apply for credit, then they should not have run a credit report on you. 

Questions: 1.How does debt settlement effect my credit?

2.Can this process be done by any company or do they have to be non profit companys.

3. If this were an option for me, who would regulate how these companys get paid and how much I would pay to have to this service completed for me?

Answer: Debt settlement, or a debt management plan, has the same impact on your credit report as does a consumer proposal; you will be rated an R7, and that rating stays for three years after you have completed all payments.

There are no regulations covering debt management plans or debt settlement.  Anyone can do them.  However, in all provinces in Canada the not-for-profit agencies that do debt management plans are members of their provincial association of credit counsellors, and they accredit them and monitor their activities.

If you are planning to do a debt management plan, contact an accredited credit counsellor, and confirm they are a member of their provincial association of credit counsellors.