Your credit rating is an open book
Everyone has a credit rating, and you should check up on yours. Even if you’ve never had a problem getting a loan or a line of credit, it makes sense to find out where you stand and ensure that your file is not a collection of costly mistakes — both human and computer.
Your credit rating is a very important part of your financial life. Correct or not, it’s an open book consulted by anyone you want credit from, from a simple credit card to major consumer loans.
And yet it’s easy to find out what your rating is, and what is recorded in your credit file.
You can also change or update the information if you can show the credit bureau that it’s incorrect, or that there have been new financial and/or business developments.
The company to get in touch with is Equifax Canada, a privately run credit bureau that reports on 97 per cent of all Canadian debtors. You can call them, locally if they’re in your phone book, or through a national toll-free line, 1-800-465-7166, and review your file over the phone.
It’s a better idea, however, to go over your file personally if you can — they have branches all across the country. At absolutely no charge, they’ll view your entire credit history and discuss any irregularities you might find. They will also mail you a copy you of your personal credit if you wish. Simply send a written request with copies of two pieces of identification to: Equifax Canada Inc., Consumer Relations Department, Box 190 Jean Talon Station, Montreal, Quebec, H1S 2Z2.
This company makes its money by providing accurate credit reports — so they’re as interested as you are in getting the facts right. They’ll guide you through your file and explain why you may be viewed as a bad credit risk. In turn, you can add items to the file, which may tell a completely different story. For example, you may have had a dispute with a supplier, a family illness, a bankrupt employer — that information should be in your file. If you’ve made private arrangements with a creditor to repay your debts in instalments, that should be there as well. Such re-payment plans help your rating.
Do it yourself
Now that you know there are things you can do to improve your credit rating, I also want to urge you to do them yourself.
Beware of so-called "credit repair" firms or "credit clinics" that promise to fix a bad file — they’re advertising heavily these days on the heels of seasonal consumer spending. There’s very little, if anything, they can do that you can’t do yourself. Be especially careful about the services that promise to clean up a bad record and turn it into A-1 — that’s just about impossible.
Whatever you do, please don’t pay any money up front.
Hundreds of these "credit repair clinics" have cropped up in the past few years, just lying in wait for the financially strapped who’ve been denied a line of credit for their business or personal needs.
These "clinics" charge up-front fees starting at $500 and if, for example, you’ve declared personal bankruptcy, the charge can go as high as $1,500! They claim they can magically turn a bad credit rating into a good one, but they’re not recognized by any government body and are legally unable to remove any unfavourable rating that may exist in your file.
If you do have real credit problems and you can’t convince Equifax to change the story in your file, consider working with your local credit counselling service to improve your credit record and financial history. They can help you consolidate loans, negotiate with creditors and get yourself back on the right financial track. And you can find their number in your local phone book.