Archive for Credit Repair

Interac – The easier way to get hosed.

I haven’t used my debit card for POS purchases in years. When I did use it regularly my card was compromised three times, with one instance resulting in my HSBC account being frozen for thirty days and my having to swear an affidavit at my own expense attesting that I did not make the withdrawls myself.

I no longer do business with HSBC either as a result of this incident.

This commercial bothers me because as a consumer we do not have any protection when our bank cards are compromised. Read the fine print carefully, and it is clear that should the bank decide to wash its hands of your case they can (the fact that they typically make good on losses is customer service driven, they DO NOT have to as your PIN is considered your electronic signature).

Unlike credit cards which typically have a zero liability guarantee in the case of fraudulent transactions, debit means your bank account (along with your pre-authorized debits, direct deposits and cheques) may be interupted, frozen or closed due to an incident.

It happened to me because I was an uninformed consumer. These days I’ve taken pains to compartmentalize my banking, and to limit my exposure in the event my information is compromised.

Getting your Canadian Credit Reports…FREE

Ok, I’m a little obsessive about my credit report. If you’re a Canadian then you likely keep coming across US information on credit reporting that (while similar) is different than the way things are done up here.

For instance, here in Canada you can request practically unlimited free copies of your credit report (last year I ordered 12 credit reports from Equifax,11 from Transunion and 2 from Northern Credit/Experian).

Lets talk about your credit “report” for a moment here. The bureaus are required to provide you a copy of your credit report on demand (following sufficient proof that you are who you claim you are), and that report includes information on your previous (and current) addresses, former and present employers, credit extended (credit lines) and bad credit (collections) activity. Also included are a history of inquiries, which we’ll talk more about in a second.

Your credit “score” on the other hand is a number (between 400 and 900 depending on the formula used) that provides a quick reference as to the risk involved in extending you credit. The score is NOT provided for free, and must be paid for (although you can use your credit “report” to guesstimate your score through one of the online Credit Score Calculators.

Back to your credit report for a moment. The easiest way of ordering your credit report is to call into either Equifax or Transunion (or both preferably) and request a credit report through their automated service. A number of questions will be asked (based on your credit report – ie previous addresses, cities of residence on specific dates etc etc) and if they are answered correctly a report will be mailed to your most current address (they confirm your address before completing the call) within a week.

Equifax: 1-800-465-7166
Transunion: 1-800-663-9980

If you fail the verification then you have to go about this the old fashioned way my mailing in a request along with copies of some ID and a utility bill showing your present address. Turnaround time on this sort of submission is typically in the 3-5 week range.

Equifax Canada
Credit Report Dispute Form (Direct link to PDF file)
P.O. Box 190
Station Jean-Talon
Montreal, PQ H1S2Z2

Transunion Canada
Credit Report Dispute Form (Direct link to PDF file)
P.O. Box 338 LCD1
Hamilton, Ontario L8L7W2

You also receive an updated credit report after each disputed item on your report is changed (the new report shows the changes) so if you’ve the time then sending in your disputes one at a time would mean a steady flow of current credit reports.

Now quit making excuses and order your credit report. How are you going to know what they’re saying about you if you don’t keep them honest?

Canadian Credit Repair – Part I

Information on Canadian Credit Repair is difficult to find, and so I figured I’d put together a small primer for those seeking information on the topic.

Step 1:Know thine credit“.
If you’ve no credit, bad credit or you simply don’t know then it’s time to sit down and find out just what the credit bureaus (or Credit Reporting Agencies) have on you. The three credit bureaus in Canada are Equifax, Transunion and Northern Credit. They are required to provide you with a free copy of your credit report if you request it in writing.

By mail the reports take 2-4 weeks to arrive, and the information is presented in different formats by each bureau (although the core information remains the same). You’ll want to carefully review the information for accuracy, and return the attached “dispute” forms if any inaccurate entries are discovered (I’ve found Transunion is much more efficient in the dispute process than Equifax, and I didn’t even bother with Northern Credit as they really had no usefull information about me).

Outstanding legitimate debts should be settled as quickly as possible, and any agreements with the creditor (or their agent) should be made IN WRITING. Verbal promises of removing the negative entry from your credit report are worth the paper they are printed on.

Negative entries will typically “purge” from your credit report six years after the default date. Time is, ultimately on your side.

Your FICO score is absent from the free credit reports, but let’s worry about the content before we start chasing arbitrarily assigned numbers rating you.

Step 2:Are you ready?

There is no point embarking on this journey if you’re not ready to exercise responsible use of your credit. Credit repair/establishment takes time, and faltering merely resets the clock. The most essential element here is knowing what you can afford to spend and ensuring that you recognize credit as “credit” and not as “available funds”. Resist the temptation to “max out” any new lines of credit, and pay close attention to the “fine print”, as the options listed below come with significant fees and interest rates.

The most important element here is you.

Step 3:Establish positive credit entries”.

Credit Cards: If you have a relationship with your bank you may be able to obtain a low-limit credit card with no deposit (depending on your specific credit situation). If they are unwilling or unable to issue you a card then you may have to obtain a “secured credit card” where a cash deposit is held by the issuer against the credit limit assigned to the card. Not all banks offer secured cards, but don’t fret, there are other options:

These cards are expensive (at between $59-90/year) in service fees alone, and charge a steep interest rate, but they provide you with the opportunity to demonstrate responsible use, and are reported to the Credit Bureaus. Conventional wisdon has it that you should use them for small purchases each month, paying the balance off as each statement is received (to avoid paying interest). As secured cards report the credit limit on your credit report you should ensure that you never exceed 25-30% of your limit.

Responsible use of these cards over a period of time should not only significantly improve your credit score, but may allow you to qualify for a more conventional credit card with no (or much lower) fees and lower interest rates. Beware however, responsible use of this new credit is still essential.