Credit Repair can be an overwhelming process, but don’t let it bring you down. Consolidated Credit is here to help.
Repairing your credit is not as difficult as you’ve likely heard. With time and the right discipline, you can bring yourself back to a healthy state of financial outlook. Follow this guide and the steps provided to understand your credit report, find the mistakes that are hurting your credit score, and get tips on how to dispute scams and errors on your credit report.
Step 1: Obtain your credit reports
The first thing to do is order your credit report from the two main credit bureaus in Canada. Each credit bureau maintains its own copy of your credit history, providing two separate reports. To maximize your credit scores with credit repair, you need to obtain and correct both reports.
You can use the following information to contact each credit bureau to obtain a copy of your report:
|Equifax Canada||TransUnion Canada|
|Equifax Canada, Inc.|
Consumer Relations Department
Box 190 Jean Talon Station
|TransUnion Consumer Relations Dept.|
P.O. Box 338, LCD1
Phone: 1-866-525-0262 (except Quebec)
Step 2: Identify errors in your report
Once you receive your reports from each credit bureau, it is time to review them carefully. Since the reports will be different for each bureau, this will take some time. Look for the following:
- Discrepancies in personal information, such as your name (and variations), your social insurance number, or addresses
- Mistakes in account listings, such as late payments that aren’t correct, as well as incorrect balances, and duplicate listings of the same account
- Incorrect negative items such as bankruptcy, judgments, liens, collection accounts, or late payments
- When a lender or creditor reviews your credit report, they file a credit inquiry that shows on your credit reports. Look for companies you don’t recognize, as this may indicate fraud.
Use this worksheet to list any mistakes you found on the two credit reports. If you have any questions, contact the bureau using the toll-free numbers:
|Item||Type of Problem (a mistake, negative information, etc.)|
It’s important to note if you have legitimate negative items on your reports and they are not errors, or you won’t be able to change them. Negative remarks like late payments, collection accounts, charge-offs and other public record items can stay up to six years on your report.
Bankruptcy remains on file for six years or more from the date of filing. Reporting times may vary by type of filing and province or territory. For instance, the bankruptcy reporting period is seven years on the TransUnion report in Ontario, Quebec, New Brunswick, Newfoundland and PEI; multiple bankruptcies may show for 14 years.
The older negative information becomes, the less weight it has on your credit score. While positive information, such as timely payments, can enhance your score, even if the negative items are still lingering on your report.
One of the most challenging parts of reviewing your credit report is understanding how long negative information and penalties will remain. The following chart provides a general guide of how long data can be reported for both credit bureaus:
Step 3. Disputing Mistakes
This is the hardest part because you need to be meticulous. All your complaints have to be in writing, in letter form. You can either write to the credit bureaus or the creditor that provided the negative information. You can also try making a phone call before writing to try to find a quick-fix resolution to the problem.
Use the following sample dispute letter to make your disputes:
The following provides a sample of a dispute letter that you can use to make your disputes:
123 Main Street
Any province, Canada A1B 2C3
Social Insurance Number
I am writing to dispute two items on my credit bureau pulled on [DATE]:
– Account # 12345 – Bank Name – The account is not mine. I do not have any accounts from this lender
– Account # 6789 – Bank Name – The account incorrectly shows a balance. I paid it off on DATE. Please
update my file to show a zero balance
Thank you in advance for your efforts to resolve this matter.
In general, the credit bureaus will respond within 30 days of the day you make your dispute to tell you the results of the investigation. You can make the dispute over the phone or by letter. However, putting your dispute in writing is recommended to have physical proof of your inquiry. Always make sure to note any conversations you have with representatives and retain copies of any correspondence.
Step 4. Avoiding Credit Card Scams
When your credit is low and tension builds up, it’s easy to become desperate to make the situation better, quickly. That’s where you need to be the most careful. Promises of instant credit improvement and guaranteed results, such as “we can fix your bad credit” and “we can remove bad loans or liens from your credit,” are often too good to be true. Steer clear of these scams. The Bank Act is the primary legislation that protects your rights in borrowing money and working with financial institutions in Canada. The law requires financial institutions to provide a full disclosure of fees, interest rates and terms applied to accounts and lines of credit opened by consumers. According to this act, it is illegal for a credit repair company to lie about what they can do for you, and to charge you before they’ve performed their services.
Trying to resolve credit disputes is a long and challenging task, but it’s possible. Just breathe, take your time, keep everything in writing, and don’t fall for the quick fix. It will only hurt you.
What to do if You Cannot Resolve a Dispute
You may not always be successful when you make a dispute. One or both of the bureaus may decide you are correct and change the information, even if the creditor disagrees, as long as you have proper documentation of your case.
If your dispute is still not resolved, you have the option to include a consumer statement in your credit report. This is a statement that’s added to your credit report that describes (usually in 100 words) your case in believing there is an error in your reports. Potential creditors and lenders can read this statement, and it may impact their decision to extend you a line of credit.
If you decide to include a consumer statement in your credit report, make sure to keep your statement brief and to the point. Focus on the facts and leave out any emotional response or personal feelings. Keep all statements professional and concise.
Next Steps Following Credit Repair
Once you complete the process of credit repair, you may see some improvement in your credit scores, depending on the impact of the corrections. If you wish to improve your credit scores further, you will need to go through the processes of rebuilding your credit and fixing your credit scores.
Always check your credit reports at least once each year and repair your credit as needed when you find mistakes. Also, you may wish to review your credit reports several months before applying for a significant loan, such as a mortgage, to ensure your reports are correct so you can secure the best terms on the new loan. If you still have further questions about how to repair your credit, call a trained credit counsellor at 1-888-294-3130 or fill out a Free Debt Analysis online.