Are you looking for credit rebuilding programs? Do you have to file a bankruptcy or a consumer proposal? Your credit rating has been damaged. And you want to know how to rebuild it. This article will teach you everything about credit ratings, and a few tips on how to improve your rating after your insolvency.
You should speak to our credit counsellors today. You can do so by filling out the form on this page. Also, you can use the live chat function. Further, you can call the toll-free number below.
Impact On Your Credit Score
Good credit history is an important deciding factor in whether a home loan application is approved. Credit scores differ from credit ratings. Scores give a more detailed “snap-shot” of your credit profile. While credit ratings have been available to Canadian consumers for years, credit scores have only been available since 2002. The best credit score is 900 and the poorest is 300. Only 5% of Canadians have a credit score above 850; 24% are at 800-849; 27% are at 750-799; 19% are at 700-749; 11% are at 650-699; 6% are at 600-640; 4% are at 550-599; 4% are at 549 or less. Sometimes a score cannot be obtained due to lack of credit history or too few lines of credit.
- 720-900 You are at the top with the best rates and terms offered to you.
- 700-719 Excellent You are a very desirable borrower.
- 680-699 Good credit. You should be in strong shape to buy.
- 660-679 OK credit. Don’t look for other exceptions.
- 640-659 Borderline. OK if everything else is strong.
- 620-639 Weak. The rest of your file must be perfect.
- 600-619 Difficult. Needs some work, or a special program.
- Below 600 Trouble! Try to fix up your credit!
How To Improve Your Score Using Credit Rebuilding Programs
How To Get Your Own Credit Report On-Line? Consumers may obtain a copy of their credit report, plus credit score, and a score analysis on-line in Canada, for a fee (of approximately $21.95). Equifax Canada provides consumers on-line, real-time access to their credit information starting at www.equifax.ca
Get Your Discharge
In order to move your credit rating, you first need to be discharged from the bankruptcy or the consumer proposal you filed.
Get Credit Again
Unfortunately, we live in a credit world, and the only way to improve your score is to use credit again.
There are 2 types of credit ratings. Revolving ratings or “R” ratings, and Installment ratings or “I” ratings. Revolving refers to credit cards, payday loans, or utility bills. Things that are in a sense revolving items. Installment credit refers to your car loans, mortgages, or lines of credit. This type of credit product is paid back on a term with installments.
In order to improve your credit rating, you need to establish both types of credit.
But how do you get credit when you’re credit rating is so poor? There are a number of credit companies out there that will lend money to people who have been discharged. The reason is that you no longer have any debts. You have been through the process and they know they can charge a higher interest rate, and it is likely you are not going to default again. As long as you are discharged from your insolvency you will have a chance to apply.
Here are a few of the companies that can lend you both types of credit even after your insolvency:
Improving Your Credit Score With Credit Rebuilding Programs
Make Your Payments. So now that you have credit again, you must make your payments on time. On-time means within the 21 day grace period. Also, most people think they need to spend a lot of money to build up this credit, but it’s not true. Also, you could buy a stick of gum every month and the credit granter has to report that you made the payment on time. Therefore, do this for 12 consecutive months, and voila your credit rating will go up.
We hope you have learned a thing or two about credit ratings and how you can improve your score even after insolvency. The important thing to remember is that you are not going to be prevented credit again. Millions of people have been through the process and everyone will get a second chance to rebuild.
Who Is A Licensed Insolvency Trustee?
A lot of people are wondering who is a Licensed Insolvency Trustee (or LIT)?
A LIT is a federally licensed individual that can provide a consumer or corporation with debt relief under the law.
If you or someone you know is struggling with debt in Canada there are 2 routes to take, formal and informal. Dealing with debt informally means doing it yourself or getting representation. You could call each creditor and ask them to lower your payments. Or you could try and get a consolidation loan and pay them off.
Formal debt relief includes two government-regulated options:
1. File bankruptcy
2. File a consumer proposal
The word insolvency is defined by the Bankruptcy Act of Canada to mean, a person who has more debts than assets. Also, they cannot meet their obligations as they are due to be paid.
In order to help these people, there is only one person to offer formal government programs. Therefore, that person is a Licensed Insolvency Trustee.
Consumer Proposals and Credit Rebuilding Programs
In Canada, a person who provided formal options was previously referred to as a Trustee in Bankruptcy. As of December 2nd, Industry Canada and the Office of the Superintendant of Bankruptcy released a new directive that changes the name of a Trustee in Bankruptcy to Licensed Insolvency Trustee (“LIT”).
The Government recognized that the word bankruptcy is charged with a lot of emotion, and this new name will take away the fear and stigma associated with that word.
The process to become licensed is not easy. One must hold a university degree, go through an intensive 2-year training program, and then pass the national oral board exam. Only until one is licensed can they then offer bankruptcies and consumer proposals.
How Do I Get Started?
- The first step is to call and set up a free initial consultation. This meeting lasts 30 minutes and the Licensed Insolvency Trustee will help you to organize your financial affairs to uncover the best way forward.
- Once a solution is chosen the Trustee will communicate to all your creditors, stop all collection calls, and any legal proceedings,
- Provide advice on money matters
- Provide you with a certificate of completion so that you are clear of your debts forever.
We are excited to help people with their bad credit. Also, our credit repair team gives consumers the ability to make more informed decisions. Further, our team can help with credit rebuilding programs.
In conclusion, we have licensed insolvency trustees who are ready and waiting to help you with your situation. Don’t let your debt take control of life anymore. Take action and call our professionals. You can also watch videos about Canadian law.
Author: Alistair Vigier is the CEO of ClearWay Law