Problems with your credit report? Have you been denied credit? Follow these steps to deal with problems on your credit report.
1. Get a copy of your credit report
By law, you are entitled to receive one copy of your credit report for free each year. There are two main credit reporting agencies in Ontario: Equifax and Trans Union. You can call them at the numbers below, but your best option is to follow the links to their web sites to download a request for your credit report.
Equifax (1-800-465-7166)
Trans Union (1-800-888-4213)
NOTE: The credit bureaus make money by selling you a copy of your credit report. You are NOT required to pay for it. It may take some hunting on their web sites, but all credit bureaus offer free credit reports by mail, so you should only pay for your credit report if you want to receive it instantly on line.
2. Review your credit report
When you receive your credit report, review it to determine if it contains any errors or negative comments. It is very common for errors to appear on a credit report, and that can effect your ability to borrow in the future. Often people with similar names have information mixed up on their credit reports.
An error may include a debt that you have already paid (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 $20 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 on your credit report, contact the credit reporting agency and provide proof that you do not owe the money. (Your credit report will include an error reporting form that you can fill out and mail back to them). 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 reporting agency 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 $20 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. There are no easy ways to remove accurate information from a credit report.
5. Repay your debt to clean up your credit report
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 19% interest credit card off first, and then repay the 12% 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 a nearby expert for advice.