by admin | Credit Counseling, Credit Repair, Uncategorized
So you want a bank loan for your business? It’s not all that easy since banks are entrusted with depositors’ money and therefore have to be very careful as to when and where they disburse these funds. Nevertheless, without disbursing loans that they charge interest on, the banks can’t really be in business which is why they can and indeed do give loans to business owners. Following are some key points to take into consideration when applying for a business loan:
1. Double check your credit score
Whenever you apply for a loan from a bank the very first thing they will check is your credit score. This is why it is absolutely essential that you know your credit score in advance before applying for a loan from ‘any’ financial institution whatsoever. Check and double check for any errors or discrepancies. Such errors may include any late payment that you may have made on time but that had erroneously being reported as late. Once such mistakes have been noted down, contact the relevant agency or credit bureau and get them rectified as soon as possible. Preferably before applying for the loan in the first place.
If you have a very high credit score (hovering around 900 in Canada), There is an excellent possibility that you will be able to acquire that coveted loan at an extremely attractive rate. However if your rating is average (If you have a mid-level score (650 to 700), you may certainly get a loan but the interest rates may be higher. But a credit score below 600 may make it very difficult to acquire a business loan because the bank will term you a high risk factor. In this scenario, even if you do manage to get the loan, the interest rates may be so high you might need to seek recourse to an alternative form of financing (such as borrowing from friends and family etc.), or you may reconsider your business expansion plans at this point in time.
Another important consideration to keep in mind is that having your loan application rejected would mean a drop in your overall credit score, effectively making it more difficult for any future borrowings later in life. So be very careful when applying for such a loan.
2. Figure out how much you need beforehand
Before applying for a loan it is necessary to figure out just how much money you need as a loan. You would have to show the bank precisely how you will utilize the amount so that they would be reassured that you would be able to pay back what you have borrowed, on time and with interest. You might need to create monthly cash flow predictions and then follow them to the letter if your loan request is approved by the bank.
3. Think long and hard
Before applying for a loan think long and hard as to why you need a loan and if it’s possible to do without it even if it leads to slower expansion of your business. Check for any alternative to borrowing from a commercial institution if a loan is absolutely necessary. This is because in the eventuality of anything going wrong the bank would be compelled to take legal action to recover its funds and that may include foreclosing on any mortgage or property that you might have put up as collateral.
by admin | Consumer Proposal, Credit Counseling, Credit Repair, Uncategorized
Credit card fraud is an all encompassing term for a form of theft and/or fraud that may be perpetrated though the illegal use of a credit card, in order to purchase goods or services as a fraudulent source of finance in a monetary transaction The purpose may be to either acquire anything without paying for it or alternately to gain access to funds in an account that the individual has no legal right to operate.
There are many broad categories of credit card fraud, these include:
Credit Card theft
Having a card stolen can be a traumatic experience and it becomes even more so if you find yourself being billed for products that you never purchased. Unfortunately, credit card theft is a pretty common phenomenon and it is imperative that a lost card should be reported and blocked ‘as soon as possible’ to avert such losses.
On the plus side though, it is not as easy for prospective thieves to actually steal credit cards and buy stuff with them. This is because more and more merchants now ask for at least some form of identification when they are being paid though credit cards. Additionally many credit card facility providing financial institutions also add a photograph of the owner’s face to the card’s front side as a security measure. While these may not be fool proof measures but they have helped mitigate losses resulting from credit card theft to an extent.
Account takeover
An account can be said to be ‘taken over’ when a fraudster manages to acquire the personal information of a credit card holder (such as mother’s maiden name, date of birth, home address and other personal information). The prospective swindler then approaches the cardholder’s bank all the while pretending to be the original card holder, he informs them that he has lost his card and has also shifted his address. Once the card is delivered to him in the name of the original owner, he may be able to steal at will till the original card holder finds out what is happening and has the card blocked.
Skimming
This is by far the most common method of credit card fraud. Skimming works by putting a legitimate card in a machine that looks just like an actual credit card reader. But in reality the machine, unlike a conventional card reader saves all the details of the card. These details are then extracted and computer hackers may use them to make unsecure transactions or even create new cards from them altogether.
”Borrowing” the card
When you hand over your card to a gas station attendant or a waiter in a restaurant when making a payment, he has the opportunity to note down your card number as well as other details. These can then be used to make unauthorized online transactions in your name.
Phishing
This is also another well known form of credit card fraud. Instead of stealing or ‘borrowing,’ the fraudster deceives his victims into disclosing their credit card details. He may call them pretending to be a bank officer or send them emails promising them winnings in a lottery ticket. Some net savvy swindlers have even been known to create websites identical to original bank sites. Once the data is entered, the thieves go to work immediately transferring either funds or buying expensive products online.
Conclusion
Irrespective of the method used, using a credit card without due authorization is considered stealing in Canada and as such is considered a criminal offence in the eyes of the law.
by admin | Credit Counseling, Uncategorized
Few parents would disagree to the importance of quality education for their offspring. Unfortunately such education does not come cheap. Therefore, it is imperative that you plan before hand since it is arguably the best investment you can make for your children.
However, once you make up your mind that you will start saving for your kids’ future, you will realise that it’s not really that difficult to save up and does not involve any big financial sacrifices either for you or your spouse.
1. Make saving Attractive for your Children
Since it’s their own future at stake it would be prudent to get the young ones involved in the saving process. This is because it is not all that difficult a concept to understand and once the child grasps it, then it just might be a life altering experience for him or her. You may consider giving your child a small allowance or stipend so as to make them understand that you don’t have unlimited resources and they are also responsible for their own future. But while doing so also make sure that they spend at least a quarter of their allowance on their own basic necessities such as clothes and school books.
2. Investment Bonds
Investment bonds may easily be acquired from any number of financial institutions and are now becoming a universally accepted option for funding the future educational needs of children and young adults in Canada. These bonds are available in a variety of different investment options that may include both variable as well as fixed interest.
3. Start as early as possible
When it comes to your children’s future, it is never too early to start. If you plan ahead by saving as early as possible, you would be able to have a tidy nest egg by the time your kids grow up to be of college going age.
4. Be Creative in your Saving
If you feel that the amount you are saving is not good enough to afford your children a quality education, even in the long run than figure out just what part of your expenses have to curtail so as to ensure that your savings are correspondingly higher. For instance, if you ‘order in’ four times a week, reduce it to twice a week and put the amount saved into your kid’s education ‘nest egg.’
5. Don’t put all your eggs in one basket
If you want to save and invest for junior’s education, it would be advisable not to put all your savings in only one account. Rather you should try and hedge your bets by investing in different places such as investment bonds or stocks or even property.
6. Set clear cut goals
Once you have determined how much you want to save and for how long, you may set your core goal accordingly and in this way budget your monthly expenses. Since this type of saving would be more in the nature of a day to day observation of expenses, it would help you stay on track while serving to keep you motivated in the long run as well.
by admin | Bankruptcy, Consumer Proposal, Credit Counseling, Uncategorized
The rather unusually named ‘debt snowball’ strategy is a method many credit counselling agencies espouse as a means to help reduce your overall debt burden over an extended period of time. This stratagem is not all that difficult to master one you are able to understand it completely.
Essentially, how the system works is that if you have more than one credit card debt, you are required to pay off the smallest debts first while making only minimum payments of the larger debts regardless of how large they are.
Once the smallest debts have been completely eliminated, you may than move on to the next smaller one while following the same concept of paying more for the smaller debts and keeping away ever impending solvency by making minimum payments of the larger debts, overall.
Slowly and gradually, as all your smaller debts are eliminated one by one, you may then increase the payment amounts of your larger debts rather than continue to pay the minimum amounts you were making before to your credit card service providers. Eventually, your larger credit card debts would also be paid and you would be finally able to live a debt free life once again.
How it works
The ‘Debt Snowball’ method aims to get rid of smaller debts first even if they are charging low interest rates and encourages you to make only minimum payments of even high interest loans regardless of how much higher they may be.
According to this strategy, the money that you earn every month will be utilized to pay off the smallest debts first (however, you have to make sure that it does not affect your basic living expenses since then you would be forced to take even more loans effectively exacerbating the vicious cycle) while the minimum dues on your other loans are paid irrespective of the fact that their interest rates are steadily increasing and you may in essence have to end up paying ‘interest on interest.’
However, if you have two or more credit card loans whose payables are roughly equal, then many credit counselling agencies advise paying off the one whose interest rates are higher.
There are some key factors to take into ‘account’ (pun intended) while attempting to create the proverbial ‘Debt Snowball’
1. Stop spending beyond your means!
This is the most basic step of all. You can’t really expect to live a debt free life if you continue to use your credit cards to spend money that you don’t have, while being well aware of the fact that this is the single most important factor that is responsible for putting you in debt in the first place!
2. Be Myopic
Most credit counselling companies that use the debt snowball approach also advise you to acquire ‘tunnel vision’ instead of trying to pay off all your bills simultaneously. When it comes to credit card bills, focus on only one bill at a time and start on another one only after the first one has been completely paid off.
3. Don’t stop at the very first pay off
Once a bill has been paid off successfully, rather than using the money freed to buy non essentials, it is advisable to continue to utilise that sum to pay off the next bill. This process has to continue without a break till ‘all’ your debts have been paid off and you can now enjoy a completely debt free life.
by admin | Credit Counseling, Uncategorized
Credit counseling, also referred to colloquially as ‘Debt counseling’, is a form of financial counseling that typically helps indebted people handle and deal with their financial issues. It also refers to counseling for people who require financial loans and assistance but are not sure if they are eligible for it and if they are, then how to go about acquiring the same.
For many people, organizations providing credit counseling are their last lifeline and may well save them from absolute insolvency, economic failure.
Credit counseling works to educate individuals by empowering them though various tools, such as budgeting and education, so as to help them get rid of their debt burdens.
As a general rule, such counseling is undertaken by “credit counseling agencies’ that have been hired by the indebted parties to commence and eventually successfully close negotiations with the creditors on behalf of the financially solvent party. These credit counseling agencies ensure that their clients are not proclaimed defaulters due to their absolute inability to meet the minimum payments of the amounts they owe to their creditors.
Such agencies have been contracted by the indebted parties to work for them and look after their interests and so help relieve them of the clutches of the ‘debt traps’ they may find themselves in.
These agencies may be broadly defined into two different types.
Non Profit Organizations or NPOs
These organizations do not levy any service charges on their client (the debtors) nor do they require any fees for their assistance. Most of the time they get funded by the creditors.
Commercial Credit Counseling Agencies
They are employed to work on behalf of the indebted party for a pre-determined financial remuneration. They charge a fees and represent their client 100%
by admin | Bankruptcy, Consumer Proposal, Credit Counseling, Credit Repair, Uncategorized
When you go to a creditor in order to get a loan, the first thing they want to know is your credit rating. A credit score is something that summarizes your credit history including your present financial condition. This is basic credit scoring, but there are certain areas of credit ratings that most people are unaware of. Following are some of them:
- Something as simple as paying your bills on time is something that could actually enhance your credit score.
- It is not only your financial history, but also a bad public record that can lower your score by a good margin.
- A bad credit score can even cause hindrance in getting the desired job. Many employers judge professionalism on the basis of how you manage your life – most importantly, your finances!
- If you have a good credit limit, you don’t have to use all of it. It is recommended to keep within thirty percent of your credit limit to keep your credit score in a good condition.
- Clearing your mortgage does not help in improving your credit score. Instead, when you’re not paying mortgage (even due to the fact that you have cleared the full payment on it), your credit points get reduced.
- Those old accounts that you no longer use might still be of use. The main reason for this is because your new creditors will feel safer when they get to see your long, healthy credit history. Unlike common belief, shorter (even though clean) credit history is not as good as a longer (and fair) one.
- Opting for a secured credit card is a better option for starters as compared to choosing an unsecured one, right away. In most cases, taking an unsecured credit card is not an option for people having no credit history.
- Don’t focus all your credit on a single loan instrument. Try to keep a mixture of different products like a credit card, a car loan, and a home mortgage etc. Focusing all your credit at one instrument is not considered very healthy.
- Looking to rent a place? Even landlords take a look over your credit ratings before renting the place, just to make sure that you don’t default on the rent payments.
- A credit score above 650 is considered a good score.
- In Canada, Equifax and TransUnion are the only agencies for credit reporting.
- Even staying at a single place for a longer period of time can improve your credit ratings.
- Try sticking to one or two credit accounts at most. This will help you manage your finances in a better way as opposed to having a lot of accounts. Furthermore, make sure your accounts have very little to no balance. This will help you in maintaining or even improving your credit score.
There are a lot of things that affect your credit scores. Therefore, to maintain a good one, you should be aware of most, if not all, of the factors that help in building a good credit rating. Damaged your credit rating already? Contact GTA Credit Solutions Services Ltd. (GTA CREDIT) to help you in getting your credit scores back on track.
