FAQs
Approved
Your credit rating is an assessment of your ability to handle the financial burden of credit at a particular time. It is important to remember that your credit rating is dynamic. This means that it will change as your financial circumstances change.
While most financial institutions offer similar products and collect similar information during the approval process, credit granting policies will vary by product and from one credit grantor to the next.
Recognizing that everyone’s financial situation is unique, here are some common reasons why applications are often declined:
1. History of missed or neglected payments
This will likely lead to a lower rating on your credit bureau and could be of particular impact if previous creditors were forced to write off a loss.
2. Inadequate proof of income
A T4 slip or a pay stub is generally required as minimum proof of income. Depending on the type of income you earn (for example, if you are self-employed or a contracted employee) and the type of loan you require, more information may be requested.
3. Lack of employment or income stability
Based on your employment history, it must appear reasonable that your income will continue into the future.
4. Insufficient income
Your total income must support your current liabilities and living expenses plus the additional credit you are applying for. If your income doesn’t meet the requirement, you may be able to have your application co-signed by a relative or friend who does meet the criteria and who will agree to be liable for the debt if you fail to make the payments.
5. Lack of collateral
Depending on the type and size of the credit requested, you may be required to provide collateral of sufficient value to support the debt. For example, a personal mortgage or Home Equity Secured Line of Credit requires the security of a residential property.
6. Avoid using credit to pay off credit
Consolidating balances from several credit cards into a lower-rate loan may be a smart move to reduce your interest charges and lower your payments so that you can keep them current, as long as you don’t continue to increase your debt load. But simply making payments on one credit card with funds drawn, for example, from another credit card does not necessarily improve your overall rating because it can be seen as an attempt to avoid paying off your debt. It’s much better to focus on paying off the credit you have.
7. Ask for help
If you find yourself getting in over your head, Click here to go to our Credit Repair page.
Recognizing that everyone’s financial situation is unique, here are some common reasons why applications are often declined:
1. History of missed or neglected payments
This will likely lead to a lower rating on your credit bureau and could be of particular impact if previous creditors were forced to write off a loss.
2. Inadequate proof of income
A T4 slip or a pay stub is generally required as minimum proof of income. Depending on the type of income you earn (for example, if you are self-employed or a contracted employee) and the type of loan you require, more information may be requested.
3. Lack of employment or income stability
Based on your employment history, it must appear reasonable that your income will continue into the future.
4. Insufficient income
Your total income must support your current liabilities and living expenses plus the additional credit you are applying for. If your income doesn’t meet the requirement, you may be able to have your application co-signed by a relative or friend who does meet the criteria and who will agree to be liable for the debt if you fail to make the payments.
5. Lack of collateral
Depending on the type and size of the credit requested, you may be required to provide collateral of sufficient value to support the debt. For example, a personal mortgage or Home Equity Secured Line of Credit requires the security of a residential property.
Vehicle’s are the easiest part of the process, we have or can get any vehicle. We spend a tremendous amount of our time making sure the approval is right for your credit situation as everyone is different. All vehicles book differently with the lenders so its important to know what we do to help you the best.
Most people may not know it, but the insurance industry is colour-blind. It doesn’t matter if your car is blue, red, silver, white, or black, your insurance rate for that make and model of car will be the same.
What colour is your car? See what the most popular car colours are.
Not necessarily. People often think a 2-door car is sportier and thus more expensive to insure but insurance companies rate cars based on the claims history of that vehicle—not how many doors it has. They look at things like the car’s accident frequency, repair costs, theft frequency, vandalism and safety ratings for each make and model. When these factors are combined, a 4-door could cost more to insure than a 2-door model.
That depends. Your first minor speeding ticket (typically defined as being less than 50 km/h over the speed limit) may not affect your insurance rate; it will depend on your insurer. But, get two or three and you’ll probably be paying more to be insured. A major speeding ticket (usually 50 km/h or more over the speed limit) and your rates go up for sure.
Unlikely. Where you live is one of the factors taken into consideration when determining your rate. When you move your premiums will likely change; for the lucky, it might mean paying less, for others, it might mean paying more.
This one confuses many people. A deductible is the portion of an insurance claim you agree to pay; your insurance company picks up the rest. As a result, the more you’re willing to take on at the time of a claim, the less you’ll have to pay in premiums. Translation: The higher your deductible, the lower your premium.
Highly unlikely. Auto insurance rates vary considerably from company to company. In fact, each insurer’s car insurance rates are so unique to them that it’s pretty safe to say that no two are alike.
The last myth proves why shopping around to compare quotes is time well spent. Shop around for car insurance quotes to make sure you are getting the coverage you need at the best available price.
Your credit history
Every time you apply for or receive credit, and every time you make or don’t make a payment on time, you are building your credit history.
When you apply for credit, your financial institution has three ways to evaluate your credit history —
They review your past dealings with them;
They consider any new information you provide in your credit application;
They may contact a third party credit agency for a report on your overall credit history.
Credit agencies collect credit information from the companies that provide the credit to you. A strong credit record enhances your ability to get credit in the future. Records containing negative reports, such as overdue payments or non-payments, could make it more difficult for you to borrow or get credit in the future.
Since your credit bureau report represents a summary of your activities with a variety of financial institutions and consumer companies, it is a good practice for you to request the details of your credit rating from the credit agencies periodically. This will help you to understand your rating and ensure that the information the credit agencies are using is correct.
To find out how to obtain a copy of your credit bureau report, you may contact the credit bureau agencies directly:
Equifax Canada 1-800-465-7166 consumer.relations@equifax.ca
On your credit report in Canada, each creditor assigns you a credit score on a scale from 1 to 9. R1 is the best credit rating and R9 is the worst. Here are their meanings:
• R1 – You pay that creditor’s loan on time.
• R2 – Your payments are 30 days late.
• R3 – Your payments are 60 days late.
• R4 – Your payments are 90 days late.
• R5 – Your payments are 120 days late.
• R6 – Typically not used.
• R7 – You are in a consumer proposal, consolidation order, or debt management plan (offered through a non-profit credit counselor).
• R8 – It is used to show that a secured creditor has taken steps to realize on their secrity (e.g. repossessed your car). It rarely appears on a credit bureau report as after they take your car they generally commence legal or collection action which is rated R9.
• R9 – A bad debt placed for collection or considered uncollectible, or you are bankrupt.
Mary lost her job a few months ago due to company restructuring. She had no “emergency savings” so she used her credit cards to make ends meet while she looked for work. Mary just found a temporary part-time job, but she still owes $25,000 on her credit card. She is finding it difficult to get by on her new lower salary. Mary checked out her debt solutions options by talking to credit counsellors, a debt consolidation loan company and a trustee. She decided that filing a proposal would give her the relief she needed to get back on track.
Here are the details of her consumer proposal:
> Mary negotiated to pay back 30% of the money she owed with no added interest; therefore, the portion of debt she committed to repay is $7,500
> She arranged to pay off the debt over five years (60 months)
> Her consolidated monthly payment is $125, which she will pay to her trustee each month
If Mary had decided on another debt solution, her monthly payments may have resembled the following for the same five-year period:
| | Mary’s consumer proposal | Credit counselling | Debt consolidation loan | “Do-it-yourself” budgeting |
| Monthly payment | $125.00 | $458.88 | $734.67 | $994.34 |
| Terms | Pay back 30% of original amount owed | Pay back debt in full with no interest, plus a “fair share fee” equal to 10% of debt | Pay debt in full at 12% interest, compounded annually | Pay back debt in full at 19% interest, compounded annually |
| Repayment period | Five years | Five years | Five years | Five years |