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Regardless of the reasons, a negative credit
report means you may not be able to get a loan,
or even rent an apartment.
The old adage, "time heals all
wounds" is particularly true when talking about
credit problems. Except in very special circumstances,
a bad mark on your credit
report, up to and including filing an assignment,
in bankruptcy
will remain on your credit record a maximum of 7 years.
After 7 years information is dropped from your record.
What if you can't wait 7 years?
If you can't afford to wait to have
your credit record "clear itself" there
are things that you can do to improve and repair your
credit.
Get
a copy of your credit report. Find out what
is on it. You cannot start addressing the problems
if you don't know what they are.
Pay your bills. If a $200
debt on a old credit card is the only black mark on
your credit report, save up $200, contact the credit
card company, and arrange to make payment. Paying
your debts is the most effective way of credit repair.
If you cannot pay off your debts
in full, consider filing a debt
management plan, a proposal
to your creditors, or personal
bankruptcy. While each of these things has a serious
impact on your credit
report, they are all improvements over a number
of individual bad items.
Once the old debts are dealt with,
you must repair your credit. Here are some suggestions:
Credit Repair in Thunder Bay
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Borrow fully secured money.
Secured loans are debts you incur that are
backed up by some sort of asset or guarantee.
The most common examples are car loans or
mortgages. If you don't pay, the creditor
sells the "security". When applying
for this type of loan, credit will generally
be granted up to 75% of the value of the underlying
security. A variation on this is to have someone
co-sign or guarantee your debt. In this case,
they will be granting credit to your co-signer,
not you. If you repay the loan, your record
will benefit. If you default, the co-signor
will be required to pay. |
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Obtain a secured
credit card. Placing a sum of money on
deposit with a bank and pledging the money
as security for the card does this. If you
don't make your required payments, the bank
will withdraw the money from your deposit
and reduce your available credit accordingly.
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Borrow for an RRSP. For
some reason, banks view people with RRSP's
differently. It demonstrates that you're looking
towards your future. When you receive your
tax refund, use the refund to repay the loan,
thereby paying off the debt more quickly then
you were required. This will cause a marked
improvement in your report. |
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Borrow when you don't
need to. Obtain a small line of credit. Use
it to pay bills and then immediately pay off
the line. Repeat this process and over time,
it will have a marked improvement in your
credit report. |
Credit Repair - The Best Advice:
Pay your bills on time. Don't bounce
any cheques. Don't overdraw your account at the bank
(even if you have overdraft protection). Show the
credit system that you are a responsible money manager
and that when you borrow money, it's because you want
to, not because you have to.
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