 |
Obtaining credit has become easier for Canadians but it is not always
easier to maintain a good credit file.
Late credit card payments, missed loan payments, bounced cheques
and unpaid bills can damage a credit files and borrowers will
have to work hard to rebuild their reputation with lenders.
A negative credit report can affect more than future credit requests.
What is a credit file?
A credit file shows a borrower’s financial history and
payment performance with a lender.
The file will typically include the amount owed or still owing, the
amount paid and time it was paid, any requests for new credit and
the types of credit in use.
It also shows if an outstanding debt has been sent to a collection
agency or if any bankruptcy claims have been made.
Who needs to know?
When considering a loan application, a lender will want to know that
the borrower has a dependable history of debt repayment.
The lender will want to check the file history with a credit bureau
to assess the relative risk of lending to the applicant. Other parties,
such as a landlord or an employer, may also need to see a credit file.
What to do with poor credit?
“There is no quick-fix solution for repairing a damaged credit
report,” says Terry Fitzpatrick, vice-president, Bank of Montreal
Consumer Lending.
“The best thing to do is to build a solid relationship with a
financial institution. This can be as simple as making regular deposits,
ensure you always have the funds on deposit to cover your cheques
and paying bills on time.”
“Before you settle on a financial institution, shop around,”
says Fitxpatrick.
“Look for a financial institution that can provide the best value
and most flexible options. Compare offers, and don’t be afraid
to ask how they can help you take advantage of today’s low interest
rate environment.” |
|
|
 |
