Archive for Credit Bureau

Have You Checked Your Credit Report Lately?

Did you know that identity theft is one of the fastest growing crimes in the country? Well it is! The Better Business Bureau of Canada reported that it costs consumers, banks, retailers and other businesses $2.5 billion a year and this number is continuing to grow. It’s vital that you check your credit report. It’s recommended by Equifax that you check your credit report at least twice a year or every few months if you’ve ever been a victim of identity theft. This will allow you to catch any inaccuracies sooner than later. You can obtain one free credit report per year.

When you check your credit report, look for the following things:

  • Check to make sure your name and address are correct 
  • Check that your S.I.N is correct if it’s provided 
  • Check to make sure all credit cards, loans, and mortgages are yours
  • Check the open and closed dates of each item to ensure it’s correct
  • Look for any credit that may be on your report that does not belong to you
  • Check the inquires against your own records

Inquiries are when a bank or a business checks your credit report to see if you are credit worthy. Often this happens if you go into a bank and apply for credit, or a landlord may check your credit if you are trying to rent an apartment. 

There are hard inquiries and soft inquiries. A hard inquiry is when you have applied for some form of credit or you have applied to rent an apartment. A hard inquiry affects your beacon score. A soft inquiry on the other hand does not affect your beacon score. It’s when a bank or an insurance company checks your credit report to see if you qualify for a pre-approved credit card or line of credit. You may also see a soft inquiry from Canada Mortgage & Housing Corporation, Genworth or Canada Guranty. These are mortgage insurance companies that check your credit report if you’ve ever applied for a mortgage and put less than 20% down payment.

If you notice something on your credit report that should not be there, contact either Equifax or Transunion immediately, depending on which report you noticed the inaccuracy.  

Would You Cosign A Loan For A Friend?

Cosigning for a friend seems like such a nice thing to do for someone. I mean who doesn’t want to help out a friend in need, plus people who need a cosigner always have a great story to why you should cosign for them.

I remember when I use to be a lender at a bank, I would come across so many individuals who should have never cosigned for someone. Some were not aware that cosigning meant they were on the hook for the loan, while others just never quite understood why their FICO score was so low because of someone else’s mistakes. Not reading the fine print when obtaining anything is just a bad idea because you always get blind sided which sucks!

I use to come across so many people who regretted cosigning for their friend or family member, simply because it prevented them from getting credit or in some cases completely destroyed their credit.

One story that I can’t seem to forget was the time when a father wanted to cosign for his daughter to get a student loan to attend university. They were both so excited that she had gotten into the school of her choice. Heck I was excited for the both of them, until I pulled the father’s credit bureau and noticed he had a car loan in arrears. He was completely surprised and thought there may have been a mistake on his credit bureau. He then realized that he cosigned for is brother to get a car a few years prior. Unfortunately I had to decline him. He and his daughter were both devastated. 

I wouldn’t recommend anyone cosign for anyone under any circumstances. If it wasn’t for my experience as a lender, I probably would have cosigned for a friend or two over the years. But after seeing many peoples lives ruined because of cosigning, I will just have to pass? What really sealed the deal for me is when I discovered Proverbs 17:18 that says it’s poor judgment to guarantee another person’s debt or put up security for a friend. I was blown away when I read this for the first time. Even God thinks it’s dumb to cosign, so why the heck would I bother.

I also realized while working at the bank that the only reasons why they want a cosigner is because they don’t trust that the borrower will pay them back. Banks are extremely intelligent and have developed systems to weed out the higher risk customers that are unlikely to pay. So why on earth would I trust even a friend or family financially over the bank. They only want a cosigner so they have someone they can trust to go after if the borrower doesn’t pay them back. Once I realized this it made it much easier to say no!

Have you or would you ever cosign for someone?

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