What affects credit rating canada
What effect will debt negotiation have on my credit rating?
Most clients who enroll in a debt settlement program will see their credit scores go down. For consumers that are already late on all of their bills or in collections, the effect may be minimal but we can not predict with any accuracy how much your score will fluctuate. Please keep in mind the settlement process may take several months or even several years for any given account. Thus, if maintaining a high credit score is a top priority for you, the debt settlement process may not be a good fit for you as you will see a damaging effect on your credit rating.
If you are unsure of your present score, we recommend you obtain copies of your credit reports and scores from the two major credit bureaus via www.transunion.ca and www.equifax.ca. That said, if you are current on your bills and decide to enroll in our debt settlement program, the effect on your credit score may be significant since accounts enrolled in our program will generally be reported as delinquent up until the time a settlement is obtained.
Upon completion of the program, your overall financial situation should be improved even though your credit rating may not be good. The money you had previously saved towards settling your debts can now be put towards personal savings, retirement, a college fund, a down payment on a vehicle or home, etc.
If you decide debt settlement is not for you, remember that bankruptcy may remain on your credit report for up to 7 years and will remain in court records forever.
We urge consumers to take into account the pros and cons of the credit issue when considering our services. While your credit score may suffer, it is important to weigh this against the benefits such as bankruptcy avoidance and settlement benefits.
How does this compare to credit counseling?
Credit counseling seeks to reduce the interest rates you pay, meaning you pay 100% of your original balance plus a reduced interest rate. Their purpose is to get you to pay the debt in full by obtaining a lower interest rate. The major problems with credit counseling are that the monthly payments are often too high, and that it may still take at least five or six years to pay the debt off. You should also know that these firms were originally established by the creditors! Additionally, a credit counselor will report that you are enrolled in a counseling program to the credit bureaus which may be reported as an R7 on your credit report for up to 3 years from the date you complete the plan. This is the same designation assigned to a consumer proposal, which is one step short of bankruptcy.
Is your service the same as debt consolidation?
No. With our debt negotiation program, we negotiate on your behalf to reduce the amount you pay to your creditors. Debt consolidation requires you to apply for and obtain a new loan in order to pay off the entire amount of your existing debt. If you have too much debt and/or bad credit, it is unlikely that you would be approved for a consolidation loan.
How long does this take?
Our goal is to have you debt free in 24-48* months, depending on your current situation. Our experienced negotiators will work with you and your creditors to settle your enrolled debts for as little as possible. During the negotiation process, creditors may continue to charge interest, tack on late fees or other charges; however, we factor this in to your overall program and estimate. The time it takes to clear a debt is mainly dependent on your financial condition, but may also depend on the creditors you enroll. We understand
that every situation is different and we can discuss your situation during the free confidential phone consultation.
* Individual results may vary and can not be guaranteed. Results will depend on your ability to save your own funds to pay settlement offers, types of debt, and willingness of creditors to negotiate. Program does not provide legal or tax planning advice, so if you need such, please consult a professional. Program may not be available in all states, and does not assume or pay your debts for you. Please request program contract, read and understand all program terms before enrolling.
Can you stop creditor harassment?
No, we can not stop creditor harassment, but you can by settling your debts. In your welcome package, we will also provide you with a phone log to monitor creditor phone conversations as well as provide you with you an overview of your rights, so that you may educate your self on what creditors can and cannot say.
How much can the program save me?
Our goal is to save our clients as much money as possible. Each situation is unique so it is impossible to predict exactly how much we can save you. Be wary of any company that tells you exactly how much they will save you as exact results are impossible to predict. Our enrollment staff will be happy to review your situation and give you an estimate on what we may be able to do for you.
Why shouldn’t I just file Bankruptcy?
If you are considering bankruptcy we suggest that you first consult with a licensed bankruptcy trustee i to determine whether you qualify and discuss the pros and cons of this option. Only a licensed trustee can give you accurate advice on this option with relation to your situation.
In our opinion, bankruptcy is an extreme option, which has serious long-term effects on your credit and can often have negative results in many aspects of your everyday life. Bankruptcy is considered only as a last-resort option for just a few of the following reasons:
- Filing for bankruptcy will require you to appear in Federal Court at least once and in most cases, even more.
- Bankruptcy paperwork requires that you reveal all of your debts as well as all of your assets.
- For up to seven years, credit bureaus are entitled to keep your bankruptcy filing on your credit report.
- A bankruptcy filing is also a matter of "public record" for anyone that wants to know about it.
Why should I use Debt Negotiation?
Most importantly, the debt negotiation firm we refer you to is not paid by other companies when helping clients to reduce their debt. The Company is profitable as an organization based on the results obtained for its clients. Tour goal is to save you every penny possibly! It is up to you take the first step and call.
I’m interested in hiring your company. What’s the next step?
The first step in becoming debt free is to have a free phone consultation with us. Give us a call today and we can discuss your situation at greater length. At this time, we will determine if you qualify and if our program would be suitable for you.
* Individual results may vary and can not be guaranteed. Results will depend on your ability to save your own funds to pay settlement offers, types of debt, and willingness of creditors to negotiate. Program does not provide legal or tax planning advice, so if you need such, please consult a professional. Program may not be available in all states, and does not assume or pay your debts for you. Please request program contract, read and understand all program terms before enrolling.Source: www.debtsettlementcanada.ca