Sometimes the various levels of Government in our contry actually publish information that is helpful. Here is some such information relating to the sudden appearance of many new 'credit repair' businesses that have sprung up and are starting to market everywhere.
Consumers should read these important points:
"Buy now, pay later!" This phrase has become a mantra for many who embrace the credit concept. But when the bill comes and you have no way of paying it, debt begins to spiral out of control.
That’s when the "Fix bad credit... fast!" line starts to look appealing. And it's everywhere these days – on television, in newspapers, and displayed prominently on public transit buses and trains.
Desperate people are often disillusioned when a credit repairer promises to fix their credit. In reality, they often only add to the debt by requiring payment for accomplishing nothing.
If you’re thinking about using a credit repairer or want good advice regarding credit, here are the things you need to know.
- Be wary of advertisements promising to "fix" bad credit. Credit repair companies may claim to improve consumers’ poor credit ratings, but, in reality, no credit repairer has the power to change or erase accurate information in a consumer’s file.
- Watch out for companies that say they’ll "fix" bad credit for a fee — often substantial, usually payable in advance. So-called credit repair clinics say they will arrange to have negative credit information removed from your record — including information about bankruptcies and default judgments. The Consumer Reporting Act provides rules regarding how long this information may appear in a consumer report. No credit repair clinic has the authority to have negative information removed from a consumer report unless it is inaccurate, or the rule in the act requires that the information be removed.
- It’s illegal for credit repairers to accept advance payment, security for payment or to charge a fee unless their services cause a material improvement to the consumer’s credit file. For example, if an account owed by one consumer appeared on the wrong person’s credit file, a correction of that information achieved through the efforts of the credit repair company would be a material improvement.
- It’s illegal for a credit repairer to represent that they can cause a material improvement to a consumer’s credit file, prior to examining the consumer’s consumer report.
- Consumers have a 10-day cooling-off period, which begins from the time they receive a copy of the agreement that meets the requirements of the act. If the company fails to repay the money, the consumer can take the company to court.
- Credit repairers must provide the consumer with a written, dated contract.
- It’s illegal for credit repairers to make false or misleading claims. In reality, no credit repairer has the power to change or erase accurate information in a consumer’s file.
Quick Tips on Managing Credit
- Check your credit files at least every one to two years to ensure the information is correct.
- Send a written request to one or both of the two major credit bureaus in Canada: Equifax Canada Inc. or TransUnion Canada Inc.
- If you question an item on the file, the credit bureau will investigate on your behalf.
- If an error is found, the credit bureau must correct it. The consumer should present official receipts to the bureau when updating balances.
- The credit bureau will send copies of the updated file to credit grantors upon request.
- The credit bureau itself does not refuse loan applications. Financial institutions (i.e. banks and other credit grantors) follow their own systems for deciding whether or not to grant credit.
- If credit is refused, the consumer is directed to a credit bureau to review the information that contributed to the decision.
Here are a few of my favorite past articles from my Lethbridge real estate and mortgage blog you might have missed or wish to recommend them to a friend.
WANTED: Single Women: - Single women are a hot mortgage market
Common Financial Problems - Avoid these financial mistakes
Get Your Credit Score UP - Invaluable insight into your credit score
Mortgage Guidelines Get Tighter - Harder and harder to borrow money
Is Your Mortgage Company Out of Business in 2009? - What to do when your bank goes broke
What is wrong with MLS - Is your info being abused?
Survivor - Real Estate Edition - Let's vote a few more off the island
Robert May is a Realtor, as well as the broker and owner of Rainbow Realty of Lethbridge Alberta. He is also a licensed mortgage broker and mortgage financing expert with Canada First Mortgage of Calgary Alberta. He has been in the lethbridge real estate industry since 1993 and offers full MLS services to the Lethbridge real estate market and surrounding area.. He can be found online at www.LethbridgeLoans.com
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Robert W May is a Real Estate Broker in Lethbridge Alberta, having now been in the industry for over 23 years. . He was also a licensed Lethbridge mortgage broker and financing expert with Canada First Mortgage of Calgary Alberta for the past 10 years. He is an industry leader always willing to help train and educate others in how to improve their business models for financial and personal benefit.