A bad credit rating can cause all kinds of problems. If your credit rating has gotten derailed, find out how to restore it and get things back on track.
If a bad credit rating has been holding you back, it is time to get a handle on it. "A poor credit rating can impact your access to credit and the interest rate that you might receive," says Pat White, executive director of Credit Counselling Canada. "It may also impact some types of employment and opportunities for renting housing."
But with a little dedication, time and perseverance, you can get things back on track. Here's how to proceed if you're ready to restore your credit rating:
1. Make sure your credit report is correct
If you've been a victim of identity theft or there's been a computer glitch somewhere, you may not be to blame for your horrible credit score. Get a copy of your credit report, just to make sure. In Canada, there are two credit reporting
agencies (Equifax Canada and Trans Union of Canada) and both will send you a free copy of the credit report that they have on you.
"It's important for you to check your credit report once a year to make certain that the information contained in your report is accurate," says White. "Mistakes can be made and identify theft may impact you. You want to ensure that what's in your report is accurate, even if it may be negative."
Correct any errors
If you do find inaccuracies, you need to complete a form to get them corrected, and there are instructions as to how to do this on both companies' websites.
"The agency will check on the item in question and either make a correction once they hear from the source or keep the information the same," says White. "Or you can check with the financial institution and ask them to correct the information. In either case, you can file a statement that will appear on your report to explain your circumstances."