FREQUENTLY ASKED QUESTIONS ABOUT CREDIT

What is credit?

Credit is the ability to borrow money or obtain goods by paying little or no money at the time of purchase. The remaining amount of the purchase must be paid during a specified period, along with the interest.

Why is a good credit history important?

Lenders only want to lend to people that have a positive record of repaying their loans and making timely payments. Your credit history will record your payments on credit cards, car loans, student loans, or home mortgages. If you have a good credit history, you will be able to:
• Buy a home or rent an apartment
• Get a job (employers may conduct a credit check to indicate your financial honesty and personal integrity)
• Borrow money (student loan, business start-up loan, renovations)
• Obtain a credit card to charge goods and services
• Finance a car

How do I know what my credit history is?

Every year, you should review your credit report. You can get a copy of your own credit report for a small fee by contacting the following credit bureaus:

TransUnion

Phone: 1-800-663-9980 

www.transunion.ca

Equifax

Phone: 1-800-465-7166 

www.econsumer.equifax.ca

Experian Credit Bureau 

Fax: 1-800-644-5876 

www.creditbureau.ca

What is a collection agency?

A collection agency is an organization that obtains or arranges for payment of money owed to a third party; this could be a person or a company.

How do I deal with collection agencies?

If you've been notified in writing that an account has been turned over to a collection agency, don't panic. The agency isn't in business to make life unbearable for you — its management just wants to collect the money you owe its client.

If I feel I'm being treated unfairly by a collection agency, what can I do?

Contact the Consumer Protection Branch.

The Consumer Protection Branch answers telephone inquiries and mediates written complaints between consumers and businesses. Topics include collection agencies, credit repair, consumer reporting, loan broker fraud, car repairs, home renovations, door-to-door sales, health clubs, modeling and talent contracts, and condominiums.

Before You Contact The Ministry of Government Services.

Before you contact the Ministry of Government Services to file a complaint, you need to take the following steps:

• Contact the business clearly outlining your complaint in writing;

• Keep proof of delivery of your complaint and any interaction with the business;

• If you are unable to resolve the complaint with the company, contact the ministry.

Tips:

How To Write A Complaint Letter
How To Write A Cancellation/Rescission Letter
How To Write A Rescission Letter

To File a Formal Complaint

Complaint Courier
This powerful online tool will give you instant access to the resources and expert advice you will need to navigate the complaint process from start to finish.

Go to the Complaint Courier >>

If you are unable to access the Complaint Courier, an online complaint form is available and may be submitted electronically.
Or, If you prefer, a form in *pdf format is available for you to print only, complete and then mail or fax to the:

Ministry of Government Services
Consumer Protection Branch
5775 Yonge Street, Suite 1500
Toronto ON M7A 2E5
Fax: (416) 326-8665

What are my rights?

The Collection Agencies Act prohibits collection agencies from doing certain things.

The Ontario Ministry of Government and Consumer Services consulted the collection industry to develop a standard to be followed by all collectors. Having a standard also allows the public to have a better understanding of what collection agencies can and can't do. The regulations forbid collection agencies from contacting you until six days have passed from sending you written notice of the following:

• The name of the creditor

• The balance owing

• The name of the agency and its authority to demand payment
continuing to contact you if you did not receive the notice unless a second copy of the written notice is sent to an address provided by you, and then contact may only be made six days after sending notice;

contacting you if you send a registered letter to the agency saying that you dispute the debt and suggest the matter be taken to court;

contacting you if you or your lawyer notify the agency by registered mail to communicate only with your lawyer, and you provide the lawyer's name, address and telephone number;

contacting you on Sunday, except between the hours of 1 p.m. and 5 p.m., and on a holiday;
contacting you other than by ordinary mail more than three times in a seven-day period without your consent, once the agency has actually spoken with you;

using threatening, profane, intimidating or coercive language, or using undue, excessive or unreasonable pressure;
continuing to contact you if you have told them that you are not the person they are looking for unless they take reasonable precautions to ensure you are that person;

giving false or misleading information to any person;

recommending to a creditor that a legal action be commenced against you without first sending you notice;
contacting your employer except on one occasion to obtain your employment information, unless your employer has guaranteed the debt, the call is in respect of a court order or wage assignment or if you have provided written authorization to contact your employer;

contacting your spouse, a member of your family or household, or a relative, neighbour or acquaintance except to obtain your address and telephone number unless the person contacted has guaranteed the debt or you have given permission for the person to be contacted.

Information provided by Ministry of Government Services Consumer Protection Branch

What if I have a bad credit rating?

Having a bad credit rating is serious. It can affect your financial reputation for up to seven years and prevent you from reaching your future goals — whether it be obtaining your dream home or having your ideal job.

What do I do to build a good credit history?

To manage debt wisely and ensure a good credit history, keep the following points in mind:

1. Pay your bills on time. If you are unable to pay your bills as agreed, contact your creditors and explain your situation. Also, you can contact a non-profit credit counseling service, such as Credit Canada (www.creditcanada.com), for professional, unbiased and confidential advice. They also provide sample letters for you to inform creditors of your situation.

2. Do not sign a credit contract until you read and understand it. If you don’t understand it, ask questions until you are satisfied.

3. Never sign a blank sheet. Your signature is your promise to pay and a contract is a legal document. Know the implications.

4. Try to pay off any debt quickly. Avoid prolonged low monthly payments and avoid having to refinance at higher interest rates.

5. Deal with known, respected, and established companies.

6. Make sure you understand the total cost of your purchase.

 

What if I am having difficulties meeting my financial obligations?

If for any reason you cannot meet your payment obligations to any of your creditors, be sure to:
• Contact the creditor immediately and discuss your problems candidly. Creditors are flexible when changes in your life make repayment of your obligations difficult but you must make them aware of your situation. Do not try to avoid your creditors; it will just make the situation worse. Use this sample letter to help you explain your situation to your creditors.

• Contact your nearest Credit Counseling Service if you find that your ability to deal with your creditors directly has become impossible, or you cannot see a way out of your financial situation on your own. Credit Canada offers no cost/low cost confidential credit counseling. It serves anyone who needs advice on how to handle money and reduce or eliminate debt. Credit Counseling Agencies also arranges debt retirement programs to help individuals deal with their creditor and get out of debt. Credit Counseling Canada (www.creditcounsellingcanada.ca) or the Ontario Association of Credit Counseling Services (www.oaccs.ca) has offices and affiliated agencies to serve you throughout Canada. For a location nearest you visit their websites.

• Think of ways to make more money - Identify ways to bolster your income, either by upgrading your skills through education and finding a better-paying job, or by taking on extra work or a second job. Don't refuse a job simply because it doesn't pay as well as the one you may have lost - those bills have to be paid somehow.

• Know your options if you are in debt or facing bankruptcy - If you know your options ahead of time, it's much easier to cope. Sell off all extra sources of debt - like a house or car you can't afford, or contacting creditors and arranging lower minimum payments on your debts. These measures can help you dig your way out of trouble and avoid the last resort, declaring bankruptcy.

• Know how to re-build your finances after serious money troubles - Learn how to live on little to no credit, or how to re-build your credit by securing and paying back a series of bank loans or the balance on a secured credit card. Re-establish yourself financially by proving yourself trustworthy with money.

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