Credit Ratings
Your credit rating is a measure of your credit-worthiness or in other words, your record of borrowing and repayment. Without a credit rating, much fewer institutions will lend you money
Governed by provincial laws, the credit bureau - the clearing-house of information on consumers' use of credit - provides a credit history, which is a list of facts about how you handle debt. This information is gathered from financial institutions, retailers and other lenders. Most of your credit information remains on your file for seven years. In addition to negative information, positive information is also reported on your file
Tips on Build up Good Credit
- Pay your bills promptly, especially credit cards.
- Borrow only what you need and what you can afford.
- Try to pay off loans on time and as quickly as possible.
Checking Your Credit Rating
As a consumer, it's your right to know your credit rating. Credit can be denied based on inaccurate or insufficient information. You may want to check your file if you aren't sure of your credit rating, if you are refused credit or if you plan to apply for a large amount of credit such as a mortgage. You can get a copy of your credit report through one of the many credit bureaus across Canada for free or for a nominal charge.
Dealing with a Credit Crisis?
Chances are you have a credit problem if you:
- Can't make your minimum monthly payments on your credit cards,
- Take cash advances for living expenses,
- Aren't sure how much you owe and
- Never seem to be out of debt.
Here are some tips to help you recover:
- Put away all of your credit cards.
- If you have several debts, consider consolidating them into one consumer loan. You'll save on the interest rate alone, especially if your debt is from credit cards.
- If slow payments are affecting your credit rating, consider contacting your creditors to see if you can make alternative arrangements. Be honest with your creditors. Let them know you're in difficulty and work with them to find the best way to meet your financial obligations.
- Try and figure out how you got into debt and stick to a plan to prevent it from happening again.
- Re-evaluate your spending habits and lifestyle
