Canadian Credit Repair – Improve Scores and Avoid Scams

Filed in blog, Credit Counseling, Credit Score by on September 5, 2013 0 Comments

Credit Repair in Canada is a topic that continues to remains relevant year after year. This is especially true because Canadians borrow money for everything from small furniture purchases to larger items such as cars and houses. If you are on this site, chances are that you are looking for credit repair information. In Canada, there is a law known as the Credit Reporting Act and the Consumer Protection Act that is used to govern credit repair organizations. To put it simply, the law is in place to ensure that credit repair services meet certain obligations to you. If you come across a credit repair company that does not abide by these rules, go elsewhere.

The reality is that repairing your credit takes both hard work and time, but the process is actually fairly straightforward. The process that we are about to discuss is completely legal, with every individual given the right to dispute any and all negative items. You can choose to go with a credit repair agency or simply opt to do it yourself without spending a dime.

The Canadian Credit Repair Process

Step 1: Review & Analyze
The first step that a credit repair company will take is to go through your credit report with a fine tooth comb. You can pick up your report by requesting a free credit report. You then pass that on to the experts who will look for any possible errors, incorrect information and miscalculations. If you are doing this yourself, look for items such as late payments, balances, personal information and credit accounts and check to see if it is accurate.

Step 2: Dispute the Errors
Once all of the errors have been found, the credit repair company will then set about going through the dispute process. In order to do that, they will need to contact the creditors and financial institutions that are responsible for the inaccurate information. If you are doing this yourself, pick up your credit card invoices or statements and call the 1-800 number to dispute an error. The customer service department will work with you to review and correct any errors. You can also report errors to the credit bureau in Canada.

Step 3: See Results
It may take a few months of back and forth, but the Credit Bureau will eventually agree to remove the erroneous items form your credit report. Actually, by law, they are required to review and follow up on any inaccuracies that you point out within a certain amount of time. You should see the positive impact of that on your credit report within 6 months. Your only job at this point is to sit back and watch as your credit rating improves.

Steering Clear of the Credit Repair Scam

The goal of repairing bad credit should be to have it done as quickly and painlessly as possible. If you are in the same boat as many of your fellow Canadians, you need your credit repaired now. That desire can actually leave you vulnerable to credit repair scams. If you decide that you just don’t have the time to deal with credit repair yourself and are considering hiring a company to do the work for you. Make sure you have hired the right organization. A quick search on the internet pulls up thousands of results and not all of them are legit.

Signs of a Scam

The following are signs that you might be the victim of a scam:

  1. The company does not provide you with a copy of the “Consumer Credit File,” which basically gives you access to all of your rights in the credit repair process.
  2. You don’t receive a copy of the contract prior to signing.
  3. The following information is missing from the contract:
    • How much you are required to pay for the service
    • Complete details of the services being done on your behalf
    • The expected completion date of the services being provided (this may also be in the form of a specified time period)
    • The business name and address if the company providing the service
  4. You need to pay for services before they have been rendered
  5. The company tells you they will also remove items that have been accurately added to your credit report
  6. You are asked by the company to create a new identity with a new Social Insurance Number, or they offer to do it for you

What Are Your Other Options?

It’s always a good idea to remember that everything that a credit repair company offers is something you can do on your own. The promise that most of these companies make is to rid your credit report of any and all negative information. If it is indeed wrong, you need only call the credit bureau providing the report to inform them of the errors. If all the information on your credit report is correct, neither you nor a credit repair company has any right to dispute it. One of the first steps to start improving your credit score is to get to know your credit report and start understand what caused your bad credit score in the first place.

About the Author ()

Pat Drummond is the author of Credit Reports Canada and considered by many to be one of the leading experts on productivity and simplicity in relation to financial planning. He started this online credit score & reporting site to chronicle and share what he’s learned in over 20 years of counseling families and individuals on debt management, obtaining loans and improving credit scores.

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