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SOFT CREDIT CHECK: TWEAKS YOU CAN DO TO MAKE IT HARD AND HAPPY

soft credit check
soft credit check

We hope that you and your family are safe, healthy and secure during this COVID-19 pandemic. Ira Smith Trustee & Receiver Inc. is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

If you would prefer to listen to the audio version of this Brandon Blog, please scroll to the very bottom and click play on the podcast.

Soft credit check introduction: What is a credit score?

When you apply for a loan, or to rent someone’s house, condo or apartment, the bank or landlord will very likely do a credit check on you. What will be of importance to them, amongst other things, is your credit score.

A Canadian credit score is a three-digit number used to indicate the creditworthiness of a debtor, based upon the info in their credit report. It is determined by looking at several factors, including if you usually pay your bills on time, just how much of your readily available credit you use, the number of charge cards you have, as well as your basic level of financial debt. The score ranges from 300 to 900 and also represents the chance that you will pay every one of your expenses on time.

There are two methods that either you or a potential lender can do a credit check on you: soft or hard. Keep in mind that even a potential landlord can fall into the category of prospective lenders. They will be advancing your credit in the form of their property. They are entrusting the tenant to take possession of their property, in return for paying for that privilege every month. In that way, a landlord is also extending credit to a tenant.

Have you ever wondered what the difference is between a soft credit check and a hard credit check? Well, in this Brandon Blog I am going to explain the difference between them for you.

Overview: Hard vs. Soft inquiries on your credit report (And Why They Matter)

The hard inquiry is a credit check that will show up on your credit report. These types of inquiries are typically the result of applying for a new loan, credit card or insurance quotes. A hard inquiry will typically stay on your credit report for up to 3 years.

A soft inquiry, on the other hand, is a credit check that does not show up on your credit report but is visible to creditors. A soft inquiry could be the result of checking your own credit score or shopping around for a new cell phone or cable plan.

More details: What is the difference between hard and soft credit inquiries?

What is a soft credit check you ask? A soft credit check request is something you can do at the beginning of your search for a loan. It will help you to know what your credit score is to help you get better loan rates, special promotions or offers a bank may be running or even help you secure that loan for which you might not qualify if your credit score was outside of an acceptable range. Knowing that information upfront can help you negotiate better for that loan deal you want.

A soft credit check is a surface-level credit inquiry that is used to get a preliminary assessment of your creditworthiness. These take place when you check your credit report or when a lending institution checks your score to pre-approve you for special deals. Soft checks do not influence your credit rating.

A hard credit check is basically a check performed by a company to find out your credit history and score. A hard credit check is different than a soft credit check. Hard checks are performed by companies that decide whether or not to lend you money. Sometimes, a hard check is also referred to as a hard credit inquiry. While a hard check is more informative than soft pulls, it can also adversely affect your score if too many checks are performed.

Sometimes you will enter into a contract for a product or service that requires you to provide authorization on the credit applications to access your credit report and credit score. Whether you are applying for a cell phone contract, to a credit card company, or applying to mortgage lenders or for auto loans, the company is going to check your credit report and score. Knowing what is a “hard credit check” can help you decide if it is worth it to use the service or not.

soft credit check
soft credit check

How could a hard credit check affect your credit score when a soft credit check will not?

Many consumers have a good credit score, but when you are one of the millions of consumers who do not, it can be difficult to get that coveted loan or credit card. To make sure that you do not have to deal with a hard credit check, you should make sure that you have no missed payments on your credit reports and that you have a diverse mix of credit (credit cards, store cards and installment loans, for example).

A hard inquiry can harm your credit score, but usually by just a few points. But how much your score is affected can depend on your specific financial situation.

Having too many inquiries on your credit report especially within a short period of time may also have an impact. And if your credit report shows multiple credit applications within a short period of time, it might appear to lenders that your finances have changed negatively.

When you apply for credit, as I mentioned, a hard credit score check is the way a potential lender can take a deep dive into your credit history. A putative lender would do so to determine if they should approve you for the credit you are applying for. This is different from a cursory soft credit check so a lender can tell you if you might qualify for a special deal or are doing your own self-assessment.

If you’ve ever before been denied for financing, denied an apartment, or had your car loan application rejected, you probably went through a hard credit check and the financial institution or landlord you approached was not happy with your results.

Soft credit check: How your initial credit limit is determined

The normal question individuals typically ask is why their credit line is not higher. In fact, the question is so usual, some credit card companies have their own applications that you can use to forecast your credit line. Nonetheless, as you may anticipate, the response is not quite as straightforward as the credit card issuers would like you to believe.

Your credit rating is an important metric in establishing what your credit line will be set at. If you have an inadequate credit rating, expect a lower credit limit and various other unfavourable terms. On the other hand, a high credit score offers you the opportunity to shop around to find the best credit card agreement and credit card issuer for you.

Soft credit check: Who creates your credit report and credit score?

Each time you make an application for a credit card, a car loan or home mortgage, your credit report is evaluated by the loan provider you are applying to. Your credit report is a document of the financial commitments you have actually currently incurred (credit cards, personal loans, lines of credit and mortgages) and your payment history. It is obtained from one of the two credit bureaus in Canada.

By now you should understand that the higher your credit score, the better your chances are to be approved for the loan or credit card you are applying for. This is because your credit rating will be seen as a lower threat to default, and therefore the bank will feel more positive that you will pay off any credit extended to you.

TransUnion and Equifax Canada are the two credit bureaus in Canada that contain your credit information. Lenders will use one of these two businesses to do the soft credit check or the hard credit check on a potential borrower or existing customer requesting additional or new credit.

These are private businesses that collect, store and share details concerning just how you use debt. Equifax Canada and TransUnion just collect information from creditors concerning your financial experiences in Canada.

soft credit check
soft credit check

Can a lender do a soft credit check or any type of inquiry without my permission?

If you are applying for credit from a financial institution or another type of lender, you will be asked to provide the authorization for them to do search one of the two major credit bureaus in Canada on you as part of their normal credit process. A lender cannot perform a hard credit pull without your OK.

No pre-authorization is required to do soft pulls. Perhaps you wish to just discover if you meet the requirements for a unique promo they may are promoting on one or more of their credit products. Or, possibly the loan provider wants to get a quick picture of your credit file to see if it is worth investing the time running you through their credit application process. The lender can get a response to both issues by carrying out a soft inquiry on you. That they can do soft credit pulls on their own.

Soft credit check: How long inquiries stay on your credit report

Your credit rating is a snapshot of your financial life, and it is important for obtaining credit, renting an apartment, even getting a job. But what happens if you want to buy a house, apply for a job, or apply for a loan and you have a negative or positive inquiry on your credit report? It is important to know how long an inquiry will remain on your report.

The rules surrounding credit inquiries and how long they stay on your Canadian credit report are a little different than in the US. In the US, hard inquiries generally stay on your record for 2 years. In Canada, there is no specific set amount of time that they stay on your report. The length of time a new inquiry is reported is determined by the business that requested the inquiry. According to Equifax Canada, a hard inquiry may not drop off your report for up to 36 months.

Home & Car Insurance Savings From Good Credit Scores

If you’ve ever shopped for auto insurance or homeowners insurance, you’ve no doubt been pressured to buy coverage you don’t need or a policy that seems like the insurance costs are just too high? If that sounds like you, don’t be ashamed! To avoid this, you should first know your credit score, since that will be the key to getting the best insurance rates.

A good credit score does more than simply affect the interest rates you pay on loans – it also affects the rates you pay on your insurance. This is because insurance companies consider your credit score when setting the rates you pay because it correlates to your likelihood of filing a claim and the likelihood of that claim being paid.

In addition, your mortgage company, your landlord and your car dealership will check your credit score when renting property, leasing a car or deciding how much of a down payment you can afford.

soft credit check
soft credit check

Can prospective employers perform a credit check on me?

If the job application you signed gives a potential employer permission to do a hard inquiry on you, then they can. Bad credit history can have many consequences that far exceed a simple refusal to get a loan. It can prevent you from getting a job, and destroy your self-esteem. How do you know if your bad credit is affecting your life? The first step is to find out what’s on your credit report.

The next step is to realize that your negative financial situation didn’t happen overnight. Your financial problems are a result of both bad luck and poor judgment.

Most of us have been there: you’re ready to start your career, turn over a new leaf and begin a new chapter in your life, but you get rejected for a job because one of the background checks turns up a bad credit report. And you are confused. You didn’t know that your report included bad credit information. And you didn’t know that you could fix a bad credit report.

But you can. As I already mentioned, it starts with you doing a soft inquiry on yourself and finding out what the bad information is. Or, once a year, for free, you can do a hard inquiry on yourself and really drill down to find out what negative information is causing the roadblock to your moving forward in life. I highly recommend that you do so as the start to improving your financial situation.

Soft credit check a summary

I hope you enjoyed the soft credit check Brandon Blog post. You may be very upset and frustrated over the current pandemic situation and your personal financial problems. You may even be downright depressed. The entrepreneur may be very frustrated that the company can no longer pay all its debts as they come due.

There may be sufficient value to take care of the secured creditor, but nothing for anyone else, including the unsecured creditors. There may be some business units that should not survive, but if cut out, the business will be viable. A receivership might very well accomplish the goals for the entrepreneur also. I have many times structured a receivership process, in order to meet the goals of the entrepreneur, while satisfying the requirements of the secured creditor.

Are you worried because you or your business are dealing with substantial debt challenges and you assume bankruptcy is your only option? Call me. It is not your fault that you remain in this way. You have actually been only shown the old ways to try to deal with financial issues. These old ways do not work anymore.

The Ira Smith Team utilizes new modern-day ways to get you out of your debt difficulties while avoiding bankruptcy. We can get you the relief you need and so deserve.

The tension put upon you is big. We know your discomfort factors. We will check out your entire situation and design a new approach that is as unique as you and your problems; financial and emotional. We will take the weight off of your shoulders and blow away the dark cloud hanging over you. We will design a debt settlement strategy for you. We know that we can help you now.

We understand that people and businesses facing financial issues need a realistic lifeline. There is no “one solution fits all” method with the Ira Smith Team. Not everyone has to file bankruptcy in Canada. The majority of our clients never do. We help many people and companies stay clear of bankruptcy.

That is why we can establish a new restructuring procedure for paying down debt that will be built just for you. It will be as one-of-a-kind as the economic issues and discomfort you are encountering. If any one of these seems familiar to you and you are serious about getting the solution you need, contact the Ira Smith Trustee & Receiver Inc. group today.

Call us now for a no-cost consultation.

soft credit check
soft credit check

We will get you or your business back up driving to healthy and balanced trouble-free operations and get rid of the discomfort factors in your life, Starting Over, Starting Now.

We hope that you and your family are safe, healthy and secure during this COVID-19 pandemic. Ira Smith Trustee & Receiver Inc. is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

Categories
Brandon Blog Post

PAYING DOWN DEBT: MY 7 ESSENTIAL YET EASY HACKS TO BE DEBT FREE

The Ira Smith Trustee Team hopes that you and your family had a restful holiday season and that you are all safe, healthy and secure.

Ira Smith Trustee & Receiver Inc. is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

If you would prefer to listen to the audio version of this paying down debt Brandon’s Blog, please scroll to the bottom of the page and click play on the podcast

Paying down debt No. 1 financial goal of Canadians for 2021: Poll

A new survey states paying down debt is the #1 economic objective of Canadians to focus on heading right into the brand-new year. Many claimed that they handled more financial and high-interest debt this year to cover day-to-day expenditures and also offset a loss of revenue.

The annual CIBC poll says having a debt repayment plan has actually continued to be the top financial priority for the past 11 years. Unfortunately, what this says is that even without a COVID-19 pandemic, Canadians have been largely unable to do so. Everyone can be excused for 2020. Canadians have been grappling this past year with the financial and health challenges because of the coronavirus.

The purpose of this paying down debt Brandon Blog is to discuss the survey results and provide some tips on how to tackle debt that needs to be paid down. I truly believe that it is not your fault that you have not been able to be successfully paying down debt. You have only been shown the old ways that do not work anymore. Below I describe my 7 easy hacks for paying down debt. It is a new way of getting into the habit. It is a process that you can set up, track and see how you progress.

The survey found the 2nd monetary top priority of Canadians for 2021 after paying down debt is merely keeping up with bills as well as getting by. The survey showed that on average, Canadians expect a positive economic outlook for 2021. The poll results indicate that 24% of Canadians believe their financial position will certainly get better in 2021. This is down from 32% in 2019.

The poll also found the top economic issues facing Canadians in 2021 consist of the rising cost of living, the increased prices of goods and a sluggish economy.

Carissa Lucreziano, vice-president of CIBC Financial and Investment Advice, claims it is reasonable that Canadians are worried given the economic climate of 2020. She states the best buffer is to be prepared with a plan to satisfy your financial objectives, which includes a realistic estimate for paying down debt, that can be readjusted when situations alter.

How Debt Affects Your Credit Scores

The first thing you should know is that debts have a ripple effect across your whole financial life, including your credit history.

Revolving financial obligations includes a line of credit or credit card debt where you can churn, or rotate, a balance from month to month. You can obtain as much credit as you like up to an established credit limit. Interest is charged on any outstanding balance that is not fully repaid by the due date. Your regular monthly payment can differ on revolving debt based on your outstanding fluctuating balance.

Fixed financial debt includes mortgages, auto loans, personal loans and student loans. Most of the time, the amount of money you borrow, rates of interest, the monthly due date and the size of your monthly payment are fixed and known at the start.

With both revolving and fixed financial debts, you must pay promptly. When you miss a payment, your loan provider will report it to one of the two Canadian credit bureaus: Equifax and TransUnion. The credit bureau reporting of late payments can remain on your credit records for 7 years. When you miss a scheduled payment, you not only still owe that amount, but you will also have to pay late or default fees. Now the debt costs you even more!

Besides your payment history, there are other ways each type of financial obligation influences your credit score. With fixed installment debt, having a high outstanding amount does not have a huge effect on your credit score.

Rotating debt is a different story. If you are using a high percentage of your available credit from month to month, it will likely have an adverse result on your credit report and credit score. This is particularly true if you are doing it with numerous credit cards.

Your credit score will be negatively influenced because by using a large percentage of your available revolving credit, your credit utilization score is high. Credit utilization has considerable influence in calculating your credit score. So to keep your revolving debt outstanding as low as possible compared to your authorized credit, ideally, you ought to be paying down debt fully every month.

Why Credit Card Debt Is So Dangerous: My paying down debt calculator

When it comes to financial obligations, credit card debt is usually the most wicked.

Credit card companies can tempt you in with a low initial annual percentage rate (APR) and flashy credit limit. However, that introductory APR deal will ultimately end. When it does, you can find yourself looking at a frustrating heap of financial debt if you really did not handle your new charge card account properly. The reason revolving financial debt can be so frustrating is due to the fact that credit card interest rates are usually very high.

So, if you’re just making the minimum payment each month, it will certainly take you a long time to paying down debt. It could potentially take decades due to the interest accumulation.

Let’s say you put $15,000 on a credit card with a 19.9% APR, and then cut it up. You never get a replacement card and never spend another penny on that account. It is normal for a Canadian credit card to have a minimum monthly payment of 3% of the outstanding balance.

If all you do is make the minimum monthly payment, assuming you maintain the original minimum monthly payment as your balance declines, it will take you 25 years to pay off the full amount. You will also be paying more than double the amount you charged on the card. Here is the math:

Credit card balance$15,000.00
Credit card APR19.9%
Minimum payment3%
Monthly payment$450.00
Balance payoff300 months
Total payments$33,156.26

As you can see, paying down credit card debt this way is very expensive and I have not yet met a person who is comfortable paying down debt over 25 years, other than for perhaps the mortgage on their home.

How Personal Loans Impact Credit Scores

Personal loans also influence your credit score. Whether the loan account one-day damages or improves your score depends on 2 primary aspects: (i) exactly how you take care of the account and what else your credit history shows.

Too many applications could injure your score. That is because when you make an application for credit, an inquiry is logged onto your credit report. Too many such inquiries can damage your rating. The reason is that with more than one application close together in time, the formula assumes that you need the money and at least the inquiries before the last one turned you down.

Your credit might increase as your personal loan ages and there are no negative notations about missed payments. Initially, a new account could lessen your credit score. As your personal loan gets older and remains current, it shows you are using that debt responsibly. That can help your numbers.

A fixed personal loan might reduce your credit usage. Individual loans are fixed installment financings, which do not affect your revolving application ratio in any way. You can have a high balance on a fixed personal loan. If you pay off credit cards with a fixed installment personal loan, then your revolving utilization ratio must reduce. Over time, as long as you don’t get the credit card balances back up there and have the new personal loan outstanding, this can improve your credit score.

Your credit blend could also be enhanced with a personal loan. The credit scoring formula rewards you for having a diverse combination of accounts on your credit report. If you do not have any installment borrowing on your report, getting a fixed installment personal loan may improve your credit score. You just have to make sure that you are making your monthly payments on time for paying down debt. If not, it will damage and not help your score.

paying down debt
paying down debt

7 hacks for paying down debt quickly

Hack 1 – This is my first step to ending up being totally debt-free. This is important prior to anything else. You need to get some quiet time and start to make you’re coming to be debt-free goals real. It is a process that anyone can learn. Making those goals real does not suggest merely thinking them out for 5 seconds. What will you do daily when you are debt-free? What will it feel like? How will your life be changed? How will you feel? Write out this story on a notepad or better still a vision board. After that follow the rest of the steps below to begin to focus on your paying down debt strategy.

Hack 2 – Just how much do you intend to pay off in three months? In six months? You will make use of the steps discussed below to produce these objectives. The recommendation is that you have some shorter-term goals of just how much to save and therefore just how much debt to pay back.

These shorter-term goals need to feed into your longer-term objective. They’re easier to get to than the full objective. They also will certainly inspire you to keep going when you reach them. With your short-term objectives clear, it is time to prepare your month-to-month spending plan. It is a strategy of writing down where your money comes from and where your money is going.

You need to take the time to jot down every source of revenue you have and just how much comes from each one. You likewise need to identify and also write down where the money is going – line by line. As soon as you have done that, you can figure out where you can really decide if you can do any other activities to bring in more and what spending you can cut out. This will get you onto a savings plan, which will then give you the extra money to let you begin paying down debt.

I know I may have just lost fifty percent of you. This isn’t a budgeting blog site in itself. You have to create your budget plan on your own. I have written other blogs on the subject of budgeting which you can read here.

Hack 3 – I like fast small flares for saving cash. It will also reveal a great deal concerning the way you spend money. Start cutting back on things from your budget plan you have control over. Things like clothing purchases, eating out at restaurants (pre-pandemic) and other entertainment. I would hazard a guess that since the lockdowns and self-quarantining began last March, you have spent less on these types of spending than the year before. Go track it from your credit card statements, I bet you will see that is the case.

You can test on your own how to lower that spending in half or eliminate it out completely over the next 2 months. I am not discussing going cold turkey and not spending anything. I am speaking about a short-term challenge of a couple of months and on 1 or 2 spending things at a time.

These spending challenges work on so many levels. I am sure you will love them just like me. By only taking one or two items off of your spending, you are not attempting to save every dime.

You can still spend. You are simply trying out cutting down on a couple of things each time. Besides saving a lot of cash, this is going to reveal to you what you do not really care about in the spending side of your budget. You will now easily have gotten into the habit of not spending money on those things. You will now have savings in the form of extra money that you can use for meeting your paying down debt goals.

What is also great is that 8 weeks is right around the time it takes to construct brand-new behaviour patterns and breaks old habits. Those brand-new practices are most likely to drive you and help you feel that saving is not as difficult as you originally thought it would be. Maintaining these brand-new spending and saving behaviours is just one of the tricks for paying down debt.

How to get out of debt on a low income

Hack 4 – Next is doing a complete decluttering. Don’t worry, I assure you it’s a lot easier than it seems. You just have to get started. Go room-to-room in your residence and itemize every little thing you do not need. Specifically, those things you have not used in a long time. Set a rule such as have I used this, worn it or looked at it in the last 5 years? If the answer is no, out it goes. Do not second guess yourself. Stick to the rule.

This could include the treadmill you might have used only in the first 3 months after you got it, the out-of-date clothes that you never wear or the furniture you never ever rest on. Anything that isn’t being made use of or making your life better, offer it for sale online.

Not only are you making a little cash to help with your paying down debt. You are ridding yourself of something you do not need and someone who will enjoy it as much as you used to.

You may find that with some of the items, you could have squandered your money getting some of these things. But that was in the past. We are now only looking forward. It will also be a good memory to have the next time you think you need to buy something. I am sure you will analyze all future buying decisions differently.

Hack 5 – This is going to be another hard decision. However, it is one that a lot of people just have to do if they are serious about paying down debt. That is taking a sober look at how you travel every day.

I like seeing or paying attention to people talking about how much financial debt they have. What always astonishes me is the number of people who have a reasonable brand-new vehicle with monthly payments they do not have the money or budget to support. Seriously, people simply do not seem to see exactly how a high regular monthly auto payment is trashing their spending plan!

Besides the payment itself, insurance, licensing and maintenance costs come with the vehicle. I am not saying you cannot have nice things or that you need to never ever get a brand-new car or truck. Perhaps a clean vehicle in good condition that just came off a 3-year lease would be extra affordable and save you cash.

Appreciate your money! We do not have a great deal of time on this earth and you have to enjoy it. However, you can’t appreciate life if you’re constantly stressed out from your debt. So have a close look at what is parked in the driveway and be honest with yourself. Can really afford it?

By following this logic you will have extra cash each month that you can allocate to paying down debt.

Hack 6 – This tip most likely will eliminate lifestyle creep. Lifestyle creep is how your spending appears to increase every time your revenue does. The result is you are always stuck in paycheque-to-paycheque mode and are never paying down debt.

Just how is it that we get tax refunds or a raise, we never have enough that amount saved? You work overtime but the cash just appears to vaporize into thin air. It is the problem of lifestyle creep. Our spending plan always seems to grow to eat up whatever income there is.

Fighting lifestyle creep suggests referring back and monitoring your budget on a regular basis. Plug in that refund or additional income on an after-tax basis. Remind yourself how much you are spending. This will let you take that initiative to not spend even more if you now have a little extra. The very best thing to do is to designate that additional money for paying down debt and then to do it right away.

By having a place for that money, it stops being a temptation to spend it. It may not seem like it will conserve much however you would be surprised just how quickly normal smaller amounts will build up over time.

Hack 7 – My last money-saving method is going to put a freeze on your credit cards. Make the essential payments you have budgeted for by using cash. You simply do not obtain that very same psychological and emotional sensation when you use a credit card that you obtain when you pay with cash. When you pay with cash, you feel the purchase. Not so much with a credit card.

I’m not saying to cut up your cards. I have a credit card I use for company spending purposes and another for personal use. It is also handy to have one for emergencies if you do not have an extra money reserve yet from your savings. Stopping the use of your bank card will still keep that alternative open yet it makes you reassess your spending on practically every product.

Simply put, these 7 money-saving hacks will give you thousands of dollars over time. You can use that money first for paying down debt. Once your debts are paid off, keep up those same habits to build up savings for investment and ultimately your retirement. Each hack is simple yet effective. You will love to see how quickly you can make progress in paying down debt. Each one is not a major step, but combined together, they will have a profound effect on your debt payment plan.

Paying down debt: Do you want an avalanche of snowballs?

The 7 simple hacks I describe above gets you the cash to use to pay down your debt. Now you actually have to do it. I am sure that you have heard of the two highly touted methods of actually paying down debt being the: (i) debt avalanche method; and (ii) debt snowball method. Dave Ramsey, a US financial commentator, is a strong proponent of these methods.

Here is a summary of the two methods for paying down debt. In the debt avalanche method, you pay off your debt with the greatest rate of interest initially, 2nd greatest next and so forth. In the debt snowball method, you pay off the single debt in total with the smallest outstanding balance first, second smallest 2nd and so forth.

The debt avalanche approach of paying down debt approaches the matter from a financial perspective. The snowball method is more psychological. Both get you to reduce your debt. Both help you reach your financial goal.

If you would like more details on both the debt avalanche and snowball payment plan methods of paying down debt, read my March 2019 blog – Debt Help Near Me: Our Toronto Debt Repayment Calculator Strategy.

Can I book a meeting with someone who can help?

Of course, you can. Contact the Ira Smith Team for your no-cost consultation. We can start helping you immediately getting into a pattern of paying down debt.

I hope you enjoyed this paying down debt Brandon Blog post. If you are concerned because you or your business are dealing with substantial debt challenges and you assume bankruptcy is your only option, call me. It is not your fault that you remain in this way. You have actually been only shown the old ways to try to deal with financial issues. These old ways do not work anymore. The Ira Smith Team utilizes new modern-day ways to get you out of your debt difficulties while avoiding bankruptcy. We can get you the relief you need and so deserve.

The tension put upon you is big. We know your discomfort factors. We will check out your entire situation and design a new approach that is as unique as you and your problems; financial and emotional. We will take the weight off of your shoulders and blow away the dark cloud hanging over you. We will design a debt settlement strategy for you. We know that we can help you now.

We understand that people and businesses facing financial issues need a realistic lifeline. There is no “one solution fits all” method with the Ira Smith Team. Not everyone has to file bankruptcy in Canada. The majority of our clients never do. We help many people and companies stay clear of bankruptcy.

That is why we can establish a new restructuring procedure for paying down debt that will be built just for you. It will be as one-of-a-kind as the economic issues and discomfort you are encountering. If any one of this seems familiar to you and you are serious about getting the solution you need, contact the Ira Smith Trustee & Receiver Inc. group today.

Call us now for a no-cost consultation.

We will get you or your business back up driving to healthy and balanced trouble-free operations and get rid of the discomfort factors in your life, Starting Over, Starting Now.

The Ira Smith Trustee Team hopes that you and your family had a restful holiday season and that you are all safe, healthy and secure.

Ira Smith Trustee & Receiver Inc. is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

paying down debt
paying down debt
Categories
Brandon Blog Post

BORROW WELL REVIEW GUIDE: BORROWELL REVIEW FREE CREDIT SCORE METHOD

borrow well review

If you would prefer to listen to the audio version of this Brandon’s Blog Borrow Well Review please scroll to the bottom and click on the podcast

Introduction

Have you ever before wondered what your credit score is and what your credit history looks like? I’m certain if you ever before looked for a home mortgage, a loan, to rent a home or apartment or applied for an insurance policy, you recognize that your credit rating ends up being crucial. The loan provider, landlord or insurance provider will certainly decide on you based upon your credit history. This Brandon’s Blog is about the totally free credit report system of Borrowell Inc.; a Borrow Well review.

Inspecting your credit rating has actually generally been a really laborious job and nobody really liked to do it. With the surge of consumer FinTech over the last couple of years, two businesses have actually seen a method to produce an on the internet industry for personal loans in Canada; 1. Credit Karma Canada; and 2. Borrowell Inc. Credit Karma Canada is owned by its United States parent. Borrowell is a 100% Canadian owned firm.

Borrow Well review

I have previously blogged about Credit Karma Canada. Borrowell runs in a comparable way. Borrowell’s goal is quite straightforward. They wish to assist Canadians to make fantastic choices concerning credit and debt. They began life as a consumer lender. Borrowell thought that customers wanted personal loans. They started the firm making loans for people with excellent credit.

Borrowell discovered that it was pricey to obtain customers. Their customer acquisition cost was very high. It was a tough issue to fix. What they did was come to be the 1st business in Canada to supply credit scores absolutely free. They assumed this would be a wonderful method to obtain clients and promote what Borrowell did. They thought that it would certainly be an excellent method to make loans.

How it works

The trouble was that they were thousands of people a week inspecting their credit report, however, few of them either desired or fit the Borrowell standards for, loans. Borrowell found that people desired various financial products and not everyone had good credit. So they invested most of 2017 in developing a marketplace.

They developed an online forum for around 40 various financial institutions and other lenders. That enabled a person to get their credit score with Borrowell, and then they can after that be taken into the sales funnel. Borrowell would after that advise of products, solutions, and pointers customized for every person from their forum of lender members. Borrowell earns a fee on loans made and other financial product sales.

They wound up discovering a high level of product market fit for roughly half a million direct customers that first examine their credit report with Borrowell. Canadians now had a very easy way to regularly see their credit score and inspect their credit history.

Utilizing the Borrowell system does not influence your credit report, unlike when you apply for a loan and the potential lender performs a credit check on you. In order to ask you the setup questions, and to have the ability to provide you with your cost-free credit report and record, Borrowell acquires information from one of our two credit reporting companies, Equifax.

Borowell additionally browses particular public document data sources to try to find various other details such as:

  • Bankruptcy: A legal process used by people and companies looking for particular relief from all or some their debt.
  • Civil Judgment: A non-criminal judgment in a court, calling for the person or company to make full or partial restitution.
  • Registered Items: Other things found in public documents, like a lien against your car or truck or a home mortgage or other loan registered against your house.

Know that you are in the Borrowell sales funnel

In order to stay top of mind, Borrowell updates you on your credit rating on a monthly basis and if it has actually changed for better or for worse. This is, obviously, advantageous for any person trying to enhance their credit history. Borrowell will inform you monthly the result of the activities you are taking to boost your credit score.

Borrowell will also help you recognize what variables are affecting your credit score. In this way, they inform you what you need to do to boost your credit rating. This is particularly great for anybody trying to learn about finances and general money matters. Borrowell also provides recommendations on just how to improve your credit rating.

So their system helps you to learn about:

  • payment history
  • credit usage
  • bad comments on your credit report
  • account inquiries
  • your credit score and report
  • tips for improvement

Borrowell offers you a very easy way to see just how you’re doing financially, just how much money you have invested between credit cards and automobile and various other loans. It likewise

To learn what goes into calculating your credit score and what it all means, check out my blog, WHAT IS A GOOD CREDIT SCORE IN CANADA? THE UNTOLD CREDIT SCORE SECRETS.

Is there any drawback to the Borrowell app?

The positive side is that this is a very easy and effective method of looking into yourself in a reliable way none of our Canadian banks have actually done. Nonetheless, I likewise have some worries.

The financial partners in the Borrowell financial marketplace have to pay a fee. That charge needs to be accounted for in the price of the financial products sold. If there is competition amongst marketplace financial members, this may keep pricing consistent and competitive within the various credit score buckets. Perhaps this marketplace also gives people access to financial products they otherwise may not be able to find or get on their own.

It is safe to presume that people using this system are working on boosting their credit score. The financial partners might be costing their products for those that have actually not attained sufficient credit strength to go and negotiate the price they will be paying with any Bank. So for those with a good credit rating, this may mean that the cost of any kind of financial product via the Borrowell portal could be greater than otherwise readily available to them if they spent the time investigating.

My main concern is more generic. It would be the same as with any system like this. They maintain a great deal of highly personal and sensitive information on Canadians which they regularly update.

There are many criminals around the world who would like nothing better than to hack the Borrowell database in order to get at this information to further their devious and illegal schemes. Stealing your identity, or identity theft is, of course, the big one.

Think no further than September 7, 2017, when Equifax announced that months-long illegitimate access to its credit-report databases had led to the breach of personally identifiable information of over 148 million people, nearly all in the USA. That is the real danger I am talking about. As I mentioned, that is a danger with any computerized system storing highly sensitive information, not just a Borrowell issue.

Borrow Well Review: Do you have a negative credit report?

I hope this Borrowell review has helped you gain a better understanding. Question: Have you lost the ability to borrow because of a bad credit score? Are you having trouble making your monthly payments? Is your business dealing with financial challenges that require to be addressed immediately?

Call the Ira Smith Team today if so. We have years and generations of experience helping people and businesses seeking financial restructuring or a debt negotiation strategy. As a licensed insolvency trustee, we are the only specialists acknowledged, accredited and overseen by the federal government to supply insolvency advice and implement solutions to help you to remain free from bankruptcy.

Call the Ira Smith Team today so you can end your anxiety, anxiousness, and discomfort today. With the roadmap we establish one-of-a-kind to your scenario, we will promptly return you right into a well balanced, healthy and carefree life.

You can have a no-cost evaluation to help you to fix your credit and debt difficulties. With you, we will discover your monetary pain factors and make use of an approach to free them from your life. This will definitely enable you to start with a clean slate, Starting Over Starting Now.

 

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WHAT IS A GOOD CREDIT SCORE IN CANADA? THE UNTOLD CREDIT SCORE SECRETS

What is a good credit score in Canada: Introduction

I have previously written reviews of the two main companies that can give you your credit score for free in Canada. The two are Credit Karma Canada and Borrowell. It is one thing to know what your credit score is. But what does that number mean? Do you have control over how to increase your credit score? To answer those questions, you must know the topic I am writing about in this Brandon’s Blog. What is a good credit score in Canada?

Your credit rating

There are three main points you need to learn about your credit rating. In Canada, your credit score is a number between 300 and 900. Lenders use this to forecast just how likely you are to be responsible with the money they are considering providing you. Will you pay back the cash you are asking they fund you?

The greater your score number, the more probable you are to be an excellent wager to be able to pay back what you owe. Your credit history is composed of five elements:

  1. Your payment history composes 35%.
  2. How much debt you owe comprises 30%.
  3. The length of your history makes up 15%.
  4. 10% comes from the sorts of loans or credit cards you have.
  5. Just how often you typically apply to borrow has a 10% effect.

A better understanding

Let’s drill down on this a little more. The greatest chunk is your repayment history. This checks out whether you’re making your payments on time. If you’re late on repayments, exactly how often are you late or are there financial obligations in the enforcement and collection process. How much debt you owe takes into account how much debt is owed and how much borrowing room is still available to you.

The length of your borrowing history considers how long you’ve had your loan products for. The longer you’ve had them the better it is for your history. Types of credit look at the range of items you have. A brand-new application is when you ask for a new loan. New loan applications stay on your report for three years. Applying many times decreases your score.

The theory is that if you keep applying, you are having 2 problems. The first is that you keep needing new loans for some reason. The second problem is that you must keep being turned down in order for you to need to keep applying.

Hard and soft hits

When you apply for a new loan, the potential lender performs a check on you. This produces what is known as a hard hit which can negatively impact your score. When you pull your own reports, such as through Credit Karma Canada or Borrowell, this makes what they call a soft hit. This won’t negatively impact your score.

How often should I check my score?

You might be wondering do you need to look at your own score monthly? I am here to tell you that you don’t. Your rating adjusts throughout the month based on the five items I spoke of above. So your rating can look different from month to month.

If you’re exercising excellent credit rating behaviour a new report will certainly show that. Likewise, if you are not acting responsibly, your report and your score will show that. What I do recommend you do is check your rating by pulling an annual credit report. You do this to ensure that your record is exact and there are no errors in it.

The most effective time to check the accuracy of your report would certainly be prior to you making a huge purchase for something like a home or vehicle. You recognize that your lender will certainly perform a check. It is to your benefit to make sure everything on your rating profile looks good and is error free.

In that situation, where a lot is riding on the precision and completeness of your report, you would go directly to the two main score rating companies in Canada; Equifax Canada and TransUnion Canada. You will certainly have to pay for them to generate an Equifax or TransUnion score and history report for you. What you pay them to understand that your record is precise and totally error-free is worth that peace of mind.

4 things you must know about your score

To summarize, the 4 things you must know about your score are:

  1. Your credit score in Canada is a number between 300 and 900.
  2. Lenders use your credit score to forecast just how likely you are to be responsible with the credit they are considering providing you.
  3. The greater your credit score number, the more probable you are to be an excellent wager to be able to pay back what you owe.
  4. Your credit history is composed of five elements:
    1. your payment history composes 35%;
    2. how much debt you owe comprises 30%;
    3. the length of your credit history makes up 15%;
    4. 10% comes from the sorts of credit you have;
    5. just how often you typically apply for new credit has a 10% effect; and
    6. lastly, you don’t need to check the credit score all the time.

You might have a concern about, and ask yourself, is Credit Karma Canada safe? Is Borrowell safe? The answer is yes, but you still may have a concern. You are providing each of them with very personal information about yourself when you first sign up for their respective services. Then they do on a regular basis perform a credit score check on you. These are soft hits, so it won’t affect your score. However, they are updating your private personal information which stays on their database. Anytime such sensitive information is on a computer server, there is, of course, a danger from hackers.

The reason they regularly check your credit situation is so they can then send you an email about any change to your credit score – good or bad. They do this for two reasons. The first is to alert you about their latest finding of your credit report. The second reason is to give you a reason to go to their website. Their hope, of course, is while you are on their site seeing the change to your credit score, perhaps you will stay and look at some of the products they offer to produce revenue for themselves.

What is a good credit score in Canada: What about you?

I hope this what is a good credit score in Canada blog has helped you gain a better understanding. Question: Have you lost the ability to borrow because of a bad credit score? Are you having trouble making your monthly payments? Is your business dealing with financial challenges that require to be addressed immediately?

Call the Ira Smith Team today if so. We have years along with generations of experience aiding people and companies looking for financial restructuring or a debt settlement plan. As a licensed insolvency trustee, we are the only professionals recognized, licensed and supervised by the Federal government to provide insolvency advice and services to assist you to stay clear of bankruptcy.

Call the Ira Smith Team today so you can end your stress, anxiety and pain today. With the roadmap we develop unique to your situation, we will swiftly return you right into a balanced, healthy and carefree life.

You can have a no-cost assessment to assist you to repair your credit and debt troubles. With you, we will uncover your financial discomfort points and use a method to rid them from your life. This will absolutely allow you to begin a fresh start, Starting Over Starting Now.what is a good credit score in canada

 

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FINANCIAL DISASTER PREPAREDNESS: 4 STEP PLAN TO STOP FINANCIAL DISASTER

Financial disaster preparedness: Introduction

The people drowning in debt are always scared of the thought of speaking to a licensed insolvency trustee (formerly known as a bankruptcy trustee (Trustee). The purpose of this Brandon’s Blog is to allow me, a Trustee, to give you some basic points on financial disaster preparedness in a non-scary way. Hopefully, it can help you avoid a financial disaster.

On the 27th day of the United States Federal government closure, many federal employees that are already under money stress and anxiety are not surprisingly asking whether an insolvency proceeding is the only alternative.

These people did not ask for this. Although they will eventually receive all their back pay, that doesn’t help their cash flow today.

Some personal bankruptcies are started by events beyond somebody’s control. The US government shutdown is such an example. Alternatively, unlike the shutdown, a number are completely within an individual’s control.

Here are four ideas on just how to maintain your finances from falling off the edge right into insolvency.

Financial disaster preparedness: #1 – Keep an eye on your credit cards

Try to pay your monthly credit card bill, and all your expenses, on or before their due date. If timely payments cannot happen, pay it back asap or arrange a repayment strategy to decrease late charges as well as interest charges.

Never ever carry over a credit card balance. Attempt to pay your balances, including all your expenses, promptly.

Similarly, be conscientious what your credit history is. Almost every person will certainly have a time in their lives when they’ll need to borrow cash for some major expenditure.

Your credit score will affect the borrowing rates you are offered. Knowing one’s credit history can aid people to make a better decision on when to jump, or hold back, on a choice to borrow.

Financial disaster preparedness: #2 – Know your monthly expenses (and savings too)

When I do credit counselling and speak to people about loan basics, I discuss spending behaviours and always talk about the difference between wants and needs. I always encourage people striving for economic self-reliance to begin with a straightforward exercise: document every single expense in a month.

By mapping out all the spending, people can rank where their cash should, as well as shouldn’t, be going. For example keep an eye out for the daily latte, which is a habit because, it builds up, A more expensive specialty coffee is a want, not a need. A less expensive plain coffee could suffice.

There is one routine I always urge. Make a routine that you will set aside a particular percentage of your income for an emergency fund. The same goes for socking away, at the very least a little, to an RRSP. Work these savings into your budget.

In my experience, all consumer insolvencies commonly entail inadequate financial savings to cover the unanticipated. This is a common problem among Canadians that I have previously written about in my blogs.

Credit cards are also a significant cause of personal insolvencies. Many of our personal insolvency clients use credit cards to supplement their income. Rather than budgeting, they use their credit cards for various expenditures that they really cannot afford and are unable to pay down their credit card balances.

Financial disaster preparedness: #3 – Boost your financial literacy

There are various ways to begin early in life to prevent financial disaster problems. If these guidelines sound familiar, that’s because they are. However, yet few individuals appreciate them. That’s partly because they’re not taught it in the schools.

Canadians have a financial literacy problem. Many people think that some people are born rich and others aren’t. The reality is that those who are well off just have a more realistic understanding about spending and saving within one’s earnings.

Financial literacy, like civics education, needs to be a requirement in all elementary school, high school and university educational programs.

Financial disaster preparedness: #4 – Preserve your financial self-reliance


Those who lived through the great depression understand how fragile funds can be. Clipping coupons and looking for the most affordable prices is just part of their normal behaviour.

Insolvency filings have been at their lowest point since 2007, and there are varying explanations for the decline.

During the last decade, Canadians have amassed debt. Now that interest rates are rising, it is expected that personal insolvency filings will rise. Personal insolvencies will be more a part of our world as a result of unexpected disasters and negative decisions.

Corporate bankruptcies will always be a part of the system as markets change and businesses experience threats they cannot survive.

We must all be financially vigilant. I hope these tips will help you in avoiding any form of financial distress.

Financial disaster preparedness: What about you?

Do you have excessive debt? Are you in need of financial disaster preparedness? Does your business have way too much financial debt and is in danger of shutting down? Are you concerned that the future rate of interest hikes will make currently workable financial obligations totally uncontrollable? Is the pain, stress and anxiety currently adversely influencing your health and wellness?

If so, contact the Ira Smith Team today. We have years and generations of helping people and businesses seeking financial restructuring. As a licensed insolvency trustee, we are the only specialists certified and overseen by the Federal government to offer financial restructuring solutions.

We provide a free consultation to assist you to solve your problems. We know the discomfort financial obligations causes. We can end it as soon as possible from your life. This will permit you to start a fresh start, Starting Over Starting Now.

Call the Ira Smith Team today so that we can start helping you get back into a healthy and balanced, stress-free life.

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NO CREDIT HISTORY CAN BE AS DAMAGING AS A BAD CREDIT HISTORY

how to improve credit score 10

No credit history: Introduction

Like it or not, our lives are ruled by our ability to get credit (and hopefully use credit wisely). We need credit to buy a house or lease a property, buy or lease a car, have a credit card, get a line of credit and in many cases, get a job. Yes, ladies and gentlemen, many companies check your credit score before offering you a job. There are even online dating sites who match you according to your credit score. And, as we move towards becoming a cashless society, our ability to get access to credit will become even more important. So, having no credit history can hurt you in many ways.

No credit history: Unless you use credit you may not get credit

It’s a Catch 22, isn’t it? In order to set up even a limited credit history and get a credit score you have to use credit. Your credit worthiness is established by your ability to repay. If you pay for most things with cash or by cheque, you aren’t demonstrating your ability to repay. Therefore, if you apply for any type of loan and a credit check is done to decide credit worthiness, you won’t score well if you haven’t been using and repaying credit. Believe it or not, this may put you in the same boat as someone with a poor credit history or even a delinquent credit history.

No credit history: What is your credit score used for?

Your credit score is used to figure many things including:

  • Whether to extend credit
  • How much credit to approve
  • Whether to increase or decrease a customer’s credit limit
  • Determine the interest rate charged on a loan

There are now two ways you can get your credit score online free. One site is Credit Karma Canada and the other Borrowell.

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No credit history: The moral of the story is the best time to use credit is when you don’t need it

Many retirees think they don’t need credit anymore so they tend to pay by cash and cheque instead of credit. Then a situation arises where they need credit and they don’t have a credit history to show their credit worthiness. It’s never too late to set up a credit history. The easiest way is to have a credit card and use it (wisely). Even a secured credit card will work.

No credit history: Use credit wisely!

Using a credit card and paying off the monthly balance in full is not the same as accumulating credit card debt that you can’t afford. Using credit cards wisely can be convenient and beneficial. Credit card debt can ruin you financially.

If you’re dealing with credit card debt, or any debt that you can’t afford, you can count on The Ira Smith Team to set you on a path to a healthy financial future Starting Over, Starting Now. With our cumulative 50+ years of experience dealing with diverse issues and complex files, we deliver the highest quality of professional service. Contact us today.

 

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DIFFERENCE BETWEEN CREDIT REPORT AND CREDIT SCORE: KNOW YOUR CREDIT REPORT SCORE CARD?

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Difference between credit report and credit score: Introduction

Many people we see don’t realize the difference between credit report and credit score and they often confuse a credit report with a credit score. So, let’s get back to basics. We’ll clarify credit reports for you and explain why you should check your credit report and how often.

Difference between credit report and credit score: What is a credit report?

A credit report is a detailed record of your credit history – when you opened your account(s), how much you owe, if you make your payments on time, miss payments, go over your credit limit, etc. In Canada there are two major credit reporting agencies – Equifax Canada and TransUnion Canada. They collect information about how you use credit (lenders send them the information) and they create credit reports based on that information. Personal information that’s available in public records, such as a bankruptcy, is also included in your credit report.

Difference between credit report and credit score: What is a credit score?

A credit score is not the same as a credit report. A credit score is a three-digit number produced by a mathematical formula using the information in your credit report. You get points for using credit responsibly. You lose points if you’re having problems managing credit. In Canada, credit scores range from 300 to 900 points (900 is the best score).

Difference between credit report and credit score:: Why is your credit report so important?

As a society we are increasingly dependent on credit. Every time you apply for a credit card, a utility, mortgage, an apartment rental and often even a job, your credit history is checked. These lenders use your credit report and score to decide how risky it would be for them to lend you money or extend you credit. Your credit report and score may also be used to set your interest rate and credit limit. If you have a poor credit history it’s unlikely that you will be approved for credit cards, mortgages and other loans. And if you do get approved you will more than likely have to pay a higher interest rate than someone with a good credit history.

Difference between credit report and credit score: How often should you check your credit report?

According to the Financial Consumer Agency of Canada, you should check your credit report at least once a year. They also recommend that you order your credit report from both credit reporting agencies – Equifax Canada and TransUnion Canada and that you consider requesting your report from one agency and then waiting six months before you order from the other agency to detect any problems sooner. Mistakes on credit reports do happen so review them carefully and pay special attention to any signs of identity theft – accounts that you didn’t open, credit cards that you didn’t apply for, etc. Be aware that the credit reporting agencies charge a fee to order your credit score.

Difference between credit report and credit score:: How can I order my credit report or score for free?

You can get a free credit report. Equifax Canada offers what they call a “credit disclosure file” and TransUnion offers a “consumer disclosure”. However, these credit reports do NOT include your credit score. To get these free credit reports you must order them by mail, fax or phone and receive them by mail, fax or phone. If you prefer to get access to them online, you will have to pay a fee.

You may have seen commercials offering free credit scores. Beware! There’s no such thing. These companies are either fraudsters out to get your personal financial information or you’ll have to sign up for a paid service to get the free credit score.

Difference between credit report and credit score: Are you having trouble managing credit?

If so, contact Ira Smith Trustee & Receiver Inc. as quickly as possible. With immediate action and a solid financial plan for moving forward we can help you deal with debt and learn to manage it well in the future, Starting Over, Starting Now. We’re just a phone call away.

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BAD CREDIT: CAN IT HURT YOUR JOB SEARCH?

bad credit, credit, job search, Equifax, TransUnion, BackCheck, credit history, credit report, credit check, medical debt, marital breakdown and bankruptcy, starting over starting now, good credit and bad credit, credit check, living paycheque to paycheque, credit ratingBad credit showing up on your credit history can impact your job search. Many companies will check your credit as part of the routine background check. Some people believe that how you pay your billsgives employers an indication of the quality of your work. These employers believe that an applicant with bad credit indicates either an inability to live up to your commitments or a belief that it is not important to honour your commitments. This belief, correct or not, are traits that potential employers do not wish to inherit.

Of course this is painting a picture with very broad strokes and doesn’t take into consideration the reason for your financial problems causing the bad credit, which may be due to a divorce or a layoff. But, employers want to avoid situations when collectors start calling the office or try to garnish wages. Previously, we have written many blogs on such causes of financial problems, including:

According to Dave Dinesen, President and CEO of BackCheck, a pre-employment screening services company, they’ve screened over three million Canadians for more than 5,000 organizations, and the vast majority of employers use credit checks for identification verification purposes (such as employment history and address history). By doing so, they can also differentiate between candidates who have good credit and bad credit.

Before a potential employer can pull your credit history, you must sign a release. Protect yourself and know exactly what’s in your credit report before your potential employer does. To get a copy of your credit report contact either of the two major reporting agencies – Equifax or TransUnion. They are required to provide you with a free copy of your credit report once every 12 months, if you ask for it. Have them correct any inaccuracies that you find. If you discover anything in your credit report that could be potentially damaging, the best thing to do is be upfront with your potential employer. The likelihood is that a few late payments won’t prevent you from being hired. However, if you believe that a credit check will expose that you have bad credit and would negatively impact your job search, you may want to consider applying to smaller companies that don’t do routine credit checks as part of the hiring process.

Bad credit is serious and can impact many aspects of your life. Don’t ignore your financial problems; face them head on with professional help. Contact Ira Smith Trustee & Receiver Inc. We’ll work with you to get your life back on track so that Starting Over, Starting Now you’ll never have to be afraid of a credit check again.

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SECURED CREDIT CARD

credit score, bad credit, credit history, financial history, licensed trustee, avoid bankruptcy, bankruptcy alternatives, debt consolidation, credit counselling, consumer proposals, starting over starting now, credit scores, financial health, line of credit, rebuilding creditA secured credit card functions in the same manner as a regular credit card. The only exception being that the card is secured by the amount of deposited funds that remain safeguarded in the institution where the individual acquires the card. The card looks like a regular credit card and acts like a traditional credit card. Purchases are limited by the amount of funds backing the card. The majority of institutions require a minimum secure balance of $500. However, individuals or businesses may deposit more if desired.

Who Uses a Secured Credit Card?

The card might be used by anyone with a past or current history of bad credit. When first starting out, many young people or students have no line of credit. The card might serve as a means of establishing a credit history. Someone recently moving to Canada, having recently undergone bankruptcy or having difficulty obtaining a conventional credit card may also look into acquiring a secured card.

Newlyweds starting a life together often look for ways of establishing credit. Anyone having endured a divorce or the death of a spouse may also need to start over and rebuilding credit. Entrepreneurs having difficulty getting financial backing or searching for a means of creating a financial history might also be interested in securing a card.

Benefits of a Secured Credit Card

Getting approved for a secured card is practically guaranteed. Having a card eliminates the need to withdraw and carry cash. However, in case someone needs cash for an emergency, the card enables users to get cash advances. Numerous other conveniences of having a credit card include using the card for making reservations, purchases or services rendered.

A secured credit card offers an ideal way to establish or improve credit scores, which are typically required when needing to apply for loans. By making monthly payments for goods or services, in the same way that one would if having a traditional credit card, you can learn how to create and stick to a budget.

Many secured credit cards don’t carry the same fees that are required by traditional cards so using them is not only convenient but less expensive.

Ensuring Good Credit

After applying for and acquiring the credit card, maintaining good credit means:

i. Paying off the balance monthly

ii. Paying more than the minimal monthly amount required

iii. Making payments on time

Get a Secured Credit Card Today

Regardless of your current financial situation we can help. To find out more about secured credit cards, and even to apply for a secured credit card, click on this link for the application form. If you are experiencing financial problems, contact Ira Smith Trustee & Receiver Inc. We are a licensed trustee and will listen to your issues and provide compassionate, professional assistance to assist you to avoid bankruptcy.

We will explore alternatives to bankruptcy, such as debt consolidation, credit counselling and consumer proposals. Starting Over, Starting Now, we will assist you to regain your financial health.

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CONSUMER PROPOSALS: WHAT YOU NEED TO KNOW

CONSUMER PROPOSALS: WHAT YOU NEED TO KNOWBefore contemplating a bankruptcy, those who have too much debt should give strong consideration to consumer proposals, one of the alternatives to bankruptcy. As long as you owe less than $250,000, this is possible. This limitation excludes any mortgage you have for your home.

The advantage of consumer proposals

Consumer proposals gives individuals a chance to reorganize their finances and get back on their feet without having to go through a bankruptcy. By avoiding bankruptcy, a person’s credit rating is not seriously damaged. In addition, after all of the debts are dealt with, through consumer proposals, people have a strong feeling of accomplishment and self-worth.

Consulting with a bankruptcy trustee to find out more about consumer proposals

The first step in pursuing a consumer proposal is to meet with a bankruptcy trustee to evaluate your financial circumstances. The trustee will help draft a proposal for your creditors based upon your finances. If the proposal is accepted, you will then make your payments directly to the trustee. The exact form a proposal will take is dependent upon many variables.

In some circumstances, you may be paying only a partial amount of the debt you owe over time. In other circumstances, the debt will not be reduced, but reorganized in a way that gives you a chance to pay it all back. In consumer proposals, no further interest or fees can be charged. Sometimes it is just a longer period of time to pay back the debt. Either way, consumer proposals should be thought of as providing you with the equivalent of an interest-free loan. Whatever the final proposal is, it will help bring needed relief to your financial situation.

After filing a consumer proposal

From the time your consumer proposal is filed, you will no longer be making any payments directly to your creditors provided that the debt is unsecured. Any wage garnishment that is in place is suspended while the proposal is examined by your creditors. Lawsuits over debt recovery are also placed on hold. The proposal and the accompanying trustee’s report will provide details on your personal finances and will include an explanation of how your debts became such a problem that it has led to a need to reorganize the debt structure. Your creditors will have up to 45 days to decide to accept the offer or not. If one or more of your creditors is owed more than a fourth of the total debt, they have the right to request a meeting with you and the trustee. This request for a meeting must be done in the same 45 day time limit.

If you are in a situation where you are overwhelmed by debt with no hope of paying it back under the current circumstances, there is not much of a downside to pursuing a consumer proposal. The worst thing that can happen is that creditors do not agree to the proposal, and in this situation, bankruptcy is still an option. If it does work then you save yourself the grief of having a bankruptcy on your credit history.

If you wish to compare this information about consumer proposlas to a bankruptcy, start by reviewing our bankruptcy faqs. Contact Ira Smith Trustee & Receiver Inc. as soon as possible regarding your debt problems, to find out more about consumer proposals and Starting Over, Starting Now you’ll be on your way to living a debt free life.

Call a Trustee Now!