How to get good Credit … How to keep it…if you want to …

Computers have changed the world! Credit is now much easier to get! I am not sure that is a good thing…..

With respect to credit, the Canadian Human Rights Act forbids discrimination on the grounds of race, national or ethnic origin, colour, religion, age, sex, marital status or conviction for an offence for which a pardon has been granted.

Credit grantors extend their credit to consumers using a variety of propriety business standards and systems, as well as using the credit information from credit reporting agencies also called credit bureaus.

A good credit record can be a valuable tool that provides access to funds in order to help consumers make major purchases such as education, homes, cars, appliances, or even to travel our world. A good credit record makes things accessible, the buy now pay later mind set. Most banking and lending institutions will be more than pleased to “sell” you some money if you have good credit.

General Guidelines:

Tips for the New Credit Application:

It can be a frustrating experience for a person to establish their first credit record. The question they often ask is: How can I establish a credit record? Where do I start?”

Here are a few suggestions:

1. Establish a stable address and job; if you tend to move around a lot – use your parents address until you get established. (if they are stable)

2. Open and maintain a chequing and a savings account. If possible save money every pay period no matter how small the amount. An established chequing and or savings account will help to show that you have good money management skills;

3. Apply for your financial institution’s package deal for personal financial services. This kind of account often includes an all-purpose credit card. Get a low limit on your card.

4. You could apply for a first credit card at your local department store; sometimes it is easier to get credit from department stores;

5. If you drive, you could apply for a credit card from a gasoline company; only use this card for gas and always pay it in full when the bill arrives;

6. If you are approved for a loan from a financial institution such as a bank, credit union or finance company, be sure to repay the loan promptly, and always make your payments as agreed and on time;

7. Always know who you are dealing with and deal with reputable firms;

8. Every time your credit bureau file is pulled (unless you pull your own) you lose points; so we recommend that you Do Not apply for more than one credit item every three months;

What if your circumstances change?

Personal relationships can affect your credit rating in that your ability to obtain credit can be affected, particularly if one person has a poor credit record. However, one partner’s poor credit record does not necessarily influence the other partner’s credit worthiness.
When a major purchase such as a car or a house is made from joint income, credit grantors could combine both your credit records and consider you as a unit. In this situation, a poor credit record could lessen the value of the other’s good record. So you might want to avoid this and apply on your own.
Credit grantors are allowed to ask questions about your total family income when you apply for credit in order to determine if you are able to repay the debt. Especially if they feel you may be applying for more credit than you yourself can afford based on your own income.
In your relationship, whether you work or not, you should consider either maintaining the credit record you had before you were married, or consider establishing one of your own. You can maintain your own good credit history by keeping your own credit and bank account, and not applying to have your spouse added for joint responsibility. I highly recommend this – keep your credit separate. Have your own credit rating!
You might want to obtain a joint account to pay your household bills from however, do not give up your individual bank accounts. Always have accounts in more than one financial institution – that way you will have choices.
Maintain a “debt free” bank or credit union account – make pledge to yourself, never to borrow money from this financial institution.

Separated or Divorced

If you have become separated or divorced, an established and acceptable credit record can be an important asset. It makes obtaining credit easier and less expensive, especially at a time when credit could help you adjustment to your new life.
a) Separated but not divorced
The individual who is separated but not yet divorced has proven to be one of the most difficult areas for credit grantors because the financial circumstances for that individual may not be clear.
Sometimes the animosity between separating spouses can make it difficult to get accounts paid. Many couples have received advice not to pay any accounts until the divorce is final. (Therefore, obtaining additional credit during this time may become a problem. Try to think a head – what are your needs what are your wants.
If circumstances in the relationship change, either party can withdraw privileges to credit by notifying the creditors to stop extending credit. We recommended that a notice be inserted in the newspaper and on your credit report stating “non-responsibility for future credit granted to your spouse” However, filing a notice of non-responsibility does not cancel your contract nor exempt you from your agreement to pay your current creditors. You are still bound to the terms of the credit contract you have signed.

b) The Divorced Individual – another good reason to keep your own bank accounts
If, during marriage, the individuals have had joint credit accounts at various businesses, it is usually recommended that the joint credit account be closed and new individual accounts be opened. If you have an established source of income in your profession and your accounts have previously been handled in a satisfactory manner, there should be no problem opening the new accounts, and in obtaining future credit. This will enable you to obtain or maintain your own credit history in a satisfactory manner. It is important for you to contact all relevant credit grantors directly to apply for the new individual accounts and to request that they report your account history in your name only.

The Widow/Widower

Once a person becomes a widow or widower, it might be advantageous to change any existing accounts. Usually all that is necessary to make the change is to complete a new application form with no notation that the account was previously carried in the deceased spouse’s name. (Advantageous for whom you might ask). Be careful; get professional advice before you make any changes.
The satisfactory performance of the credit account in the past should be sufficient, providing your financial position meets the requirements of the firm, for the account to be transferred to your name.
Only do this if you WANT this credit in your name – remember if you did not sign for it is NOT your debt! Think twice before allowing any creditor to “transfer” a debt into your name from a deceased account.

Remember: if you are experiencing financial problems or want to get financial advice speak to the professionals at Solutions Credit Counselling Service Inc. today – do not wait.