1. Get your credit report
In most cases you can obtain your
own report for free, or for a nominal charge. There
are two main credit bureaus in Canada: Equifax
and Trans Union.
Look in your phone book for the location nearest you,
or call their main offices at:
Equifax
(1-800-465-7166)
Trans
Union (1-800-888-4213)
2. Review your credit report
When you get your credit report,
review it to determine if it contains any errors or
negative comments.
An error may include a debt that
you have already repaid (see #3 below). A negative
comment may result from a department store credit
card that you stopped using ten years ago, but if
it had a $10 balance owing, it may still show up on
your credit report (see #4 below).
3. Correct any errors on your credit
report
If you find an error, contact the
credit bureau and offer proof that you do not owe
the money. You may need a letter from the creditor
indicating the payments were made, or you may provide
canceled cheques to indicates payments were received.
You may also send a letter to the
credit bureau explaining your side of the story; your
comments can be attached to your credit report.
4. Repair any negative information
in your credit report
If you owe a creditor $10 and they
have filed a negative credit report with the credit
bureau, repay the creditor and ask the creditor to
remove the negative credit report from your credit
record. If a debt is legally owing, the debt must
be paid or discharged before it can be removed from
your credit report.
5. Pay off debt to help credit repair
Even if your credit report indicates
that you have made all of your regular monthly payments,
a potential lender may look unfavorably on high levels
of debt. The solution is to pay off as much of your
existing debt as possible before applying for a new
loan.
We recommend that you pay off your
highest interest debts first, so pay the 18% interest
credit card off first, and then repay the 16% interest
credit card.
6. Take other action
If you have more debt than you can
possibly repay, your credit report will only improve
by formally dealing with your debts. You may need
to file a formal proposal
to your creditors, or consider personal
bankruptcy.
For further assistance, please contact
us for advice.
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