Author: acron_control

Step 1: Recognize the problem

Step 2:  Understand the problem

Step 3: Take action

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Step 1: Recognize the problem

What type of loan do you have?

Potential problems:

(1) Interest Rates

(2) Secured vs Unsecured Loans

(3) Behind on your payments

(4) Cash flow problems

(5) Credit Issues – Credit limits / Credit scores

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Step 2: Understand the problem

Gather as much information about the problem as possible:

(1) How much do you owe? When is payment due? Who do you owe the money to?

(2) What are the key terms of your loan or credit product?

(3) Do some research on your problem using reliable sources. (ACORN Portal; Financial Consumer Agency of Canada; Steps to Justice), Speak to local community organizations, speak to others who have experienced a similar problem)

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Step 3: Take action

(1) Assess your financial situation. (See FCAC’s budget calculator)

(2) Talk to your provider/creditor.

Things you can ask your creditor for include: Spreading out payments over a longer term to reduce your monthly payment; Reduced interest rate; More time to repay; Reduced total debt.

Things to consider:

-What can you actually afford?

-Write down the contact information of the employee you spoke with.

-Be polite but persistent.

-Clearly explain your financial situation and show you are committed to repaying your debt.

-If your creditor agrees to your proposal, get it in writing.

(3) Ask for help.

If you don’t want to talk to your creditor(s) on your own, or you tried to talk to them and you’re still having trouble, don’t be afraid to ask for help. For example:

–Debt consolidation services

–Credit counselling services

–Community organizations

Remember to research these companies before agreeing to anything. Even a non-profit credit counsellor might charge to help you manage your debts.

Find out how to deal with collection agencies here

Find out how to rebuild your credit here

 

 

The content on this web site is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind.

This website contains links to third party websites. ACORN does not monitor the information available through these links and does not endorse this information.

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What should I know before signing a contract?

Credit checks (by signing you may consent to a provider checking your credit, which can negatively impact your credit rating).

Cancellation policies (how can I cancel if needed?)

Changes to the contract (can your provider change it without notifying you?)

Privacy/confidentiality (is your personal information protected? How so?

Dispute resolution (do you waive your rights to sue by signing? check if there is a forced arbitration clause)

What kind of questions can salespeople ask me?

Salespeople need to inform you that they will collect your “personal information” and must get your consent to do so. Personal information includes:

bank account numbers/balances;

transaction histories;

debt-related information;

mortgage applications/renewals;

tax returns and net worth;

credit reports and credit scores

Note: you can refuse to give personal information to a salesperson (e.g. cell provider) but they may refuse to let you sign for post-paid services. Consider pre-paid or working out a security deposit arrangement.

What should I do if there’s an issue with my contract?

The first step when trying to solve a contract-related issue is to contact the supplier.

Read your rights, either on Consumer Protection Ontario’s website or in an industry-specific document, like the Wireless Code.
-Review your contract and the supplier’s terms & conditions.
-If you cannot resolve with the supplier, you may file a complaint with Consumer Protection Ontario, or an industry ombudsman like CCTS (for wireless) or OBSI (for financial services).

Find out more: CRTC – information about the wireless code | Your Legal Rights – information about cell phone contracts

You should check your credit rating annually, unless you have reasons to check more often. You can request a copy of your credit report from TransUnion and/or Equifax to check for errors or discrepancies and potential fraudulent activity. You are entitled to a free credit report every 12months.

Credit Monitoring services (e.g. alerts) are helpful in that they notify you when fraud has occurred. However, at this point it is likely too late. These are not fraud prevention tools, but they can be good for people who have been victims of fraud and want to know when the fraudsters are using their information. These services are quite expensive though, so consider whether it is worth it for you before signing up. Alternatively, you can check your report every 12 months and be careful never to share personal/confidential information online should enable you to protect yourself from fraud without these services.

In some circumstances, certain companies may request to “pull” (access) and review your credit history. Typically, these companies offer postpaid services to their customers (such as telecom services and utilities), so the company might use a credit check to assess whether you are likely to make their payments on time.

There are two types of third-party credit inquiry:

1. Credit Related Inquiries (“hard” inquiries) and;

2. Non-Credit Related and Account Review Inquiries (“soft” inquiries).

Hard Inquiry

When you apply for a credit product e.g. a line of credit or a mortgage), companies may request your consent to access their credit report to assist in their lending decision. However, other kinds of credit checks (including for tenancy and cell phone service) can be counted as hard inquiries, depending on the entity checking your credit. Each time this occurs, an inquiry is listed on your credit file. According to Equifax, these inquiries appear on the file for 24 months and are visible to other companies viewing the file. However, a hard inquiry could remain on the file for longer than 24 months with different credit reporting bureaus. These pulls can lead to your credit score dropping by several points, and can have an even greater impact if you have a short credit history and/or very few credit accounts.

Soft Inquiry

Non-credit related inquiries and account review inquiries have no impact on an individual’s credit score. With consent or as authorized by law, companies may access all or part of your credit information before completing a transaction or entering into a commercial relationship for purposes other than credit (non-credit related inquiry) and/or to periodically review credit behaviour after establishing a relationship (account review inquiry). You may also view his/her own credit report and score, which will typically be counted as a soft inquiry. These inquiries are visible only to the client (for between 12-24 months) and not to potential lenders.