Weekend Reading

A Great Article I got from money sense.  http://www.credittalk.ca/weekend-reading-on-credit/   http://www.moneysense.ca/2012/11/01/credit-repair-companies-false-promises/

got an  email the other day from a young woman who was inquiring about companies that  say they’ll improve a consumer’s credit rating. Was it true? Was it worth the  money?

Jackie had  been in to apply for a car loan at her bank and the lender had declined her  loan. She was told only that she should check her credit bureau report.  Something there was gumming up the works.

If you don’t  already know, a credit bureau keeps records of how well consumers handle  credit. When you sign a loan application form, you give your consent to the  lender, be it a bank, credit card company and retail store, to access this  information to decide whether or not you’re a good credit risk.

Your credit  file contains a listing of debit and credit payments and it includes public  record information about how promptly you’ve paid bills, along with all the  yucky stuff like collections, judgments and bankruptcies.

You don’t  have to be a late payer to be declined. A lender may refuse a loan application  simply because the credit bureau’s records indicate that you have other loans  outstanding. Yes, everything you owe shows up—including all those credit cards  you have even if there are no balances outstanding. When credit is refused,  you’re usually advised to have a look at your credit bureau report to see  what’s amiss.

In Jackie’s  case, someone else’s information was being recorded on her credit report. The  other woman had a similar name and it was an honest mistake. All Jackie had to  do was provide the credit bureau with proof of the error and her credit report  was cleaned up.

So back to  Jackie’s original questions: Could a credit-repair company clean up a mess and  is it worth the money?

When a  company offers to “fix” your sloppy credit history, it’s often just a ploy to  get your money. And wouldn’t you rather spend that money paying down your debt,  especially when it’s virtually impossible to cover up past mistakes. While ads  for credit repair companies may seem like the cure for a credit life lived less  than perfectly, in reality, no credit repairer has the power to change or erase  accurate information in a consumer’s file.

If the  reason you’re in trouble with a potential lender is because of wrong  information on your credit file, you could pay someone to take care of the  problem for you, but it’s often just as easy to take care of that problem  yourself.

If you’ve  damaged your credit rating by missing payments, carrying high balances or over  extending yourself financially, you can improve your credit rating, but no one  else can fix the problem for you. Time to make a budget, implement a debt  repayment plan and get serious about how you manage your money.

You should  check your credit files every six months to ensure the information is correct.  Send a written request to one of the two major credit bureaus in Canada: Equifax Canada Inc. or Trans Union of Canada Inc. There is no charge for  this service.

The longer  you exhibit good credit behavior by paying your bills on time and managing your  credit wisely, the more your credit rating will improve, until you once again  achieve a favorable credit rating. And if you’ve got a good rating that’s been  marred by inaccurate reporting, it’s your job to fix it. It’s your credit,  after all.

Great Weekend Reading.

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-M