A great Article I got from Moneysense.ca 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.
-M
