The Truth about credit repair companies in Canada
If you’re living in Canada and you have bad credit the last thing you want to do is seek advice from a credit counselor. In most instances this will lead to more financial hardships as most if not all credit repair companies all over the world are dependent on people remaining in debt. They’ll have customize solutions to keep you in debt giving you misleading advice usually in the form of a step by step procedure in which they’ll charge you a fee to administer.
Fixing your credit is actually quite simple and raising your credit score is also simple. It’s not complicated however if you don’t have the money to pay your bills at this time things can and will get complicated. In Canada a person can do a consumer proposal or file for bankruptcy. In regards to time a consumer proposal can stay on your credit file longer if you opt to only pay the minimum payments(up to 8 years).
A bankruptcy on the other hand will cost you 7 years that said having bad credit without doing either one will have a similar affect on your credit score. My advice to anyone thinking of doing a consumer proposal make sure you pay more than the bare minimum every month because it takes 3 years from the time you’re discharged for a consumer proposal to be removed from your credit file.
A bankruptcy on the other hand is going to cost you 7 years which in case you’re wondering is the reason why some people opt for bankruptcy. Also it should be noted that it takes 6 years for a credit item you let get sent to collections to be removed from your credit score. It’s important to understand that companies like Equifax and Transunion are privately owned. What this means is that they calculate your credit score from a stance of how you handle yourself with credit. So allowing credit items to go into collections in many ways will have the same or similar affect on your Equifax or Transunion credit score as a bankruptcy might have.
The only difference is if you apply for credit you will have to disclose to a creditor that you have filed for bankruptcy in the past. Being that most creditors use Equifax they usually won’t put too much emphasis on your past if your current credit score and credit file is strong.
What you need to know in order to have strong credit
Despite what people are being told the best way to raise your credit score are using credit cards or using lines of credit that are offered at the bank. Some of the worst kinds of credits to get involved with are car loans, mortgages, personal loans or any loan that obligates you to pay any fixed amount of money per month! Known as installment loans these are the loans that will drag you and your credit score down. Sure a house can be an asset but if you ask any person that’s in real estate they’ll tell you after they’ve bought a few houses on credit; banks and other financial institutions will start to deny them not because of their credit score but because of the amount of installment loans or guaranteed obligations they have every month.
Credit cards although they have high interest fees or revolving lines of credit so the more you pay the less you’re required to pay monthly. Same goes for lines of credit; installment loans on the other hand are fixed expenses and if you don’t have enough assets or capital installment loans will be the kind of credit the can and will run you and your credit into the ground.
The truth about credit repair is this stay out of debt you can’t handle credit card companies offer people with good credit so many benefits now. Once you a person gets good at managing their credit card payments the next step is to get an unsecured line of credit at a favorable interest rate these types of credit are the best to have because they have to raise your credit score with the least amount of risk.
Simply pay your bills in full on time and you’re credit will soar and your quality of life will also be better. Don’t get into debt that you can’t handle and remember that in many instances it’s better to rent than it is to own! Putting 5% down on a house is usually a sign that you really can’t afford the house and a lot of people struggle and have to work a lot longer just because of the house that they decided to buy.
Try and remember everything has a cost, most people when they talk about a vehicle talk about how much money a person loses when they drive it off the lot. That’s not what I would concern myself with I would concern myself with the installment payments I would be obligated to pay every money along with the insurance another obligation and also fees related to maintaining the vehicle as well as government tags and other government related fees and expenses.
I you want good credit my advice is to stay away from installment loans. If you’re not self employed and you need a mortgage agent or a mortgage broker to get you approved for a mortgage you might want to reconsider getting a home in Canada. Currently in 2014 Canada has some of the best banks in the 1st world, sure there are people that opt to use credit unions or other private financial institutions to get a mortgage however this should only be the consumer shopping around and shouldn’t be a result of an individual being declined at a bank. If you were decline at major banks for a mortgage I would recommend thinking twice about purchasing a home.
Ultimately how you choose to spend your money is your own decision but credit repair is nothing complicated so my advice is to avoid signing up with any credit repair companies they’re not needed.
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