What is Canadian Credit Repair?
In Canada, many consumers experience errors or inaccurate items in their credit reports. These can lead to damaging effects in their credit scores and naturally result in poor credit ratings. Credit repair services look into these errors and dispute them with creditors until they are removed from the record.
This article discusses the following:
- Bad Credit Loan
- Types of Bad Credit Loans
- Credit Reporting Act
What is a Bad Credit Loan?
Bad credit loan is given to an individual or business with a poor credit rating. Obtaining a loan with bad credit is not easy since big financial institutions will not release loans to people with bad credit histories. Bad credit history is the result of loan defaults, late payments and missed payment schedules. If you try to apply for a personal loan with bad credit, it is possible that local banks will turn you down. However, even if you have an exceptionally bad credit, you can try major banks or lenders specializing in bad credit loan lending or sub-prime lenders. If you get a loan with bad credit, you might be charged higher interest rates compared to borrowers with good credit history. This will compensate the lender for the risk of lending money to a bad credit borrower.
What are the Types of Bad Credit Loans?
The following are the categories of Bad Credit Loans:
- The secured bad credit loan is given to somebody with a bad credit. It is secured by an asset owned by the borrower. If you apply for a loan with bad credit and you own a house, you can get a bad credit loan and use your house as loan collateral. You can also get a secured credit card, which will be secured by a cash deposit.
- Unsecured bad credit loan is difficult to obtain. A bad credit borrower who does not have any collateral represents a great risk for the lender. If you are granted a bad credit loan, you will have the chance to repair your damaged credit history by making regular on-time payments for this loan. In this case, the bad credit loan is the ticket to a good credit history.
What is the Credit Reporting Act?
The Credit Reporting Act defines what information credit reporting agencies are allowed to collect, to whom that information can be provided and for what purposes the reports can be used. By limiting the information a credit agency can include on a credit report, the act works to guarantee the privacy of Canadian citizens. Credit reporting agencies are private, licensed businesses that retain and provide credit information.
This information can be released upon request to employers, banks and other businesses. Activities are overseen by the attorney general's office. It also holds the right to revoke a company's license if it fails to comply with regulations set by the Credit Reporting Act.
Credit Reports are issued by credit reporting agencies may not contain information about bankruptcies, imprisonments or judgments more than six years past their discharge, payment or release date. Any current court actions or judgments are not to be included unless the current status, amount in question and the name of the lender are included.
Good Credit Rating
It takes time to establish and repair bad credit and fix and your credit score. It all depends on the status of your credit score. It is important to acquire a good understanding of the steps and time it will take you to build and repair your credit score until it becomes worthy for lenders.