Have you heard about Credit rehab – Credit Building Secured Savings Loan programs?
Credit Building secured savings programs are an innovative way to build credit and save money at the same time! Sounds good, doesn’t it? So what if I told you there is a way to get started rebuilding good credit while you save some money? Would you be interested? That’s what I thought. Read on…. Continue reading “Credit Rehab!”
Other “derogatory” factors which negatively affect your credit rating, and which the Credit Bureaus don’t like to mention to you are:
One of the major causes of point loss to your credit rating is bureau reporting errors. (They can also cost you financially as shown in the CBC report on credit reporting mistakes) Errors can be delinquent accounts reporting on your file that do not belong to you, late payments that were not late, and credit that is created from identity fraud – therefore not your credit. The Credit Bureaus are paid by the creditors who pull credit bureau files and in turn who report to them. Credit reporting is done electronically, and Credit Bureaus accept the information they are sent without any investigation into the accuracy of the information. Therefore, is it critical that you pull your credit bureau file at least once every year. Only you will know when there is an error on your file, and it is up to you to have the credit bureaus fix it.
Order your file here: TransUnion and Equifax
Look for these common errors:
- Wrong mailing addresses
- Incorrect Social Insurance Number
- Signs of identity theft
- Errors in your credit accounts
- Late payments
- Unauthorized hard inquiries
If there is an error on your file you must contact the Credit Bureau, then it is up to the Bureau to investigate your complaint and to verify the information contained in your file by contacting the reporting creditor. When contacted by the Credit Bureau, the reporting creditor will have to verify the item they have placed on your file. You are entitled to be part of that process.
Check your credit again 30-60 days after disputing errors. If any of the disputed inaccuracies remain, contact the creditor to further your dispute and determine if the item can be taken off your credit profile. If you want to tell your side of the story, forward a written request to the credit reporting agency to have a consumer statement added to your credit file. Continue reading “Other “derogatory” factors which negatively affect your credit rating, and which the Credit Bureaus don’t like to mention to you are”
What information is used to calculate my credit score, and what factors will lower my score?
If you have tried looking on the consumer reporting agencies’ (CRAs, also know as Credit Bureaus) websites, you have seen they provide VERY little information as to how your credit score is calculated. They believe this information is proprietary and therefore their “secret”. They do, however, provide a list of the main factors which affect your credit score:
- Payment History
Equifax says: “Pay all of your bills on time. Paying late, or having your account sent to a collection agency has a negative impact on your credit score.” (No kidding)
TransUnion says: “A good record of on-time payments will help boost your credit score.”
Equifax lists: “Serious delinquency; Serious delinquency, and public record or collection field; Time since delinquency is too recent or unknown; Level of delinquency on accounts is too high; Number of accounts with delinquency is too high”
TransUnion lists: “Severity and frequency of derogatory credit information such as bankruptcies, charge-offs, and collections”
- Balance-to-Limit Ratio
Equifax says: “Try not to run your balances up to your credit limit. Keeping your account balances below 75% of your available credit may also help your score.”
TransUnion says: “Balances above 50 percent of your credit limits will harm your credit. Aim for balances under 30 percent.”
Ok, so avoid maxing out your credit – because if you don’t really need more credit you’ll be able to get it, and if you do really need it then you are more of a risk.(Funny how that works) Continue reading “What information is used to calculate my credit score, and what factors will lower my score?”
How can a low credit rating affect my life?
Credit scoring is used by lenders, insurers, landlords, employers, and utility companies to evaluate your credit behavior and assess your creditworthiness.
- Applying for a loan: Your credit score will be a big factor in the decision of whether you are approved or denied your application for more credit. Your credit score will also affect the interest rate and credit limit offered to you by the new credit grantor – the lower your credit score, the higher the interest rate will be and the lower the credit limit offered – the reason for this is you are considered more of a credit risk.
- Applying for a job: A potential employer may ask your permission to check your credit file and based on what they read, they may decide not to hire you due to your poor credit history. Yes, having bad credit could cost you a job!
- Renting a vehicle: When you sign an application to rent a car, the rental company can check your credit history to determine what their risk may be when they loan you their property. So although you are not applying for credit, the application documents you sign provide your written permission to access your credit information.
- Renting an Apartment: The same is true when applying for rental housing – the landlord may assess your tenant worthiness and their risk by factoring in your credit rating and score, and they could pass you over for someone with a better credit rating.
In Canada, credit scores range from 300 (just getting started) up to 900 points, which is the best score (you walk on water). According to TransUnion, 650 is the magic middle number – a score above 650 will likely qualify you for a standard loan while a score under 650 will likely bring difficulty in receiving new credit.
Lenders who pull your credit bureau file may see a slightly different number than you see when you pull your own file. This is due to the fact that each creditor applies a specific set of risk rules, giving and taking points for different purposes or preferences. This proprietary method of scoring will make a difference in the final calculation. The score you pull for yourself is calculated using an algorithm created for consumers that approximates these different formulas, and should still be in the same numerical range as the lenders’ scores.
Order your credit report from both credit reporting agencies in Canada – Equifax and TransUnion – at least once per year for free (when requested by mail, fax, telephone, or in person), and you can pay to see your credit score if you choose.
What information is kept in my credit file?
Your credit file contains information on all of your credit accounts submitted to the credit bureaus, including balances, limits, payment history, etc, as well as identification information such as your name, address, age, social insurance number, marital status, spouse’s name and age, number of dependents, occupation, and employment history.
How long is information kept on my credit file?
|Actual inquiries made by credit grantors
||minimum of 3 years
|Credit history and banking information
||6 years from the last activity date
||6 years from the date of discharge. (for first bankruptcy)
|Judgments, foreclosures, garnishments
||6 years from the date filed
||6 years from the date of last activity
||6 years from the date filed
|Credit Counseling, Consumer Proposals to creditors, Orderly Payment of Debt (OPD), Voluntary Deposit information
||3 years from the date settled or completed
READING YOUR CREDIT BUREAU
TERMS OF SALE
O – Open Account
R – Revolving or option
I – Installment
CODES FOR CURRENT MANNER OF PAYMENT
0 – Too new to rate; Credit approved but not used
1 – Pays (or paid) within 30 days of billing; pays account as agreed
2 – Pays (or paid) in more than 30 days, but not more than 60 days, or not more than one payment past due.
3 – Pays (or paid) in more than 60 days, but not more than 90 days or two payments past due.
4 – Pays (or paid) in more than 90 days, but not more than 120 days, or three or more payments past due
5 – Account is at least 120 days overdue but is not yet rated 9. (Code 6 doesn’t exist)
7 – Making regular payments under a consolidation order or similar arrangement (eg. Debt Management Program)
8 – Repossession (indicate if it is a voluntary return) of merchandise by the consumer.
9 – Bad debt; placed for collection; skip
We have collected information from both of the consumer reporting agencies (credit bureaus), as well as our own research to try to provide a full picture on credit files and credit scores, including those little known “insider” secrets.
Topics at a glance:
What information is kept on my credit file?
How long is information kept on my file?
What is a credit “score”?
How can my credit score affect my life?
What factors affect my credit score?
How to Raise your credit score?