Credit Problems? How to legally reduce or eliminate all your debts.
DON'T IGNORE YOUR CREDIT SCORE.
What Is Your Credit Score? What Does It Mean?
HOW TO IMPROVE YOUR
EQUIFAX AND TRANS UNION CREDIT SCORE RATINGS.
Your Credit Bureau Score Is Based On
The Following Items:
- Payment History
- Public record and collection items
- Severity, frequency and recent occurrence of delinquencies
- Outstanding Debt
- Number of balances recently reported
- Average balance across all trade lines
- Relationship between total balances and total credit limits
- Credit History
- Age of oldest loans
- Number of new loans
- Pursuit of New Credit
- Number of inquiries and new account openings in the past year
- Amount of time since most recent inquiry
- Cash advances are often a sign that you are in financial trouble and can lower your score.
- Types of Credit in Use
Your score is based on all the credit-related data in your credit bureau report, not just negative data such as missed mortgage payments or bankruptcies.
Other factors may also considered by lenders.
Usually though, if your score is too low, you are automatically rejected regardless of other factors.
About Your Credit and Credit Scoring
Your Credit Score is based on information in your credit history, income, outstanding credit and debt and debt utilization over the years, access to credit, and other indicators of your financial behaviour to determine how likely you are to pay your bills on time, or if at all.
Credit Scoring is the tool used by virtually all lenders today.
Your credit score condenses your credit history into a single number ranging between 300 and 900.
When you apply for a credit card, a mortgage, a loan for a home or a car or other major purchase, the lender will look first at your Credit Score.
The higher your credit score the more likely you are to be approved for loans and receive favourable rates.
A credit score of 620 or lower is usually automatically rejected sending you to the private market, where rates are higher.
No one can repair a bad credit score. If that is your case, you will have to work hard to increase your credit score and it can take years.
You can obtain your credit report free of charge from Equifax and Trans Union. You should monitor it twice a year for changes and to protect yourself from errors and identity theft
WHERE TO GET YOUR CREDIT REPORTS
Equifax Canada Inc.
Consumer Relations Department
Box 190 Jean Talon Station
Montreal, Quebec H1S 2Z2
Tel: ( 514 ) 493-2314
1 800 465-7166
Fax: ( 514 ) 355-8502
WHERE TO GET YOUR CREDIT REPORTS
709 Main Street W
Hamilton, On L8S 1A2
Tel: 1 800 663 9980
Fax: ( 905 ) 527-0401
How Can You Increase Your Score?
- Increasing your credit score takes time and discipline
- Credit Scores consider your credit history over several years, making it difficult to increase your credit score in the short run. Over the long term you can improve your credit-worthiness by:
- Paying your bills on time and in full. Late payments and collections can have a serious impact on your score.
- Do not apply for credit frequently. Having a large number of inquiries on your credit report can worsen your score.
- Reduce your credit-card balances. If you are "maxed" out on your credit cards, this will affect your credit score negatively.
- If you have limited credit, obtain additional credit. Not having sufficient credit can negatively impact your score.
- When you're planning a big purchase like a new car, home, or a dream vacation, it's important to know what your lenders know about your credit.
- How to Improve Your Credit Score
- Maxed Out Credit Cards Are Bad. Raise your credit line: Ask your credit card companies for a credit limit increase so that your maintain a lower credit utilization rate. But do not run your cards up to the limit.
Don’t close a credit card account: If you are not using a certain credit card do not close it A low or zero balance on a card will improve your credit score. It can actually hurt your credit score if you close the account
Trans Union and Equifax use different methods of computing your credit score..
Your credit score will be different, sometimes radically different, so you need to monitor your score with each of these companies..
Some lenders use either one of these scores, while other lenders may use an average score..
On line Since 1996
CanLaw Guide to the Law on Debt for the Layperson