Importance of Repairing Credit Before Approaching Lenders

Two guest posts in one week tells us we are definitely gaining ground here at My University Money.  I’ve taken my own look at Credit Scores before, but I never pass up an opportunity to our readers to hear from a professional.  Without further ado, here is Ed O’Brien

If you are planning to purchase a home, a new vehicle, or need a line of credit from the bank, it is essential you work on improving your credit long before actually approaching lenders for financing. Credit repair is possible for every consumer but it certainly is not an overnight event. Credit repair can take months or even years to accomplish successfully, depending on how bad your debt and credit situation is.

Steps to Better Credit Scores

All consumers need to start at the same point on the road to better credit. There are three agencies in Canada responsible for maintaining the credit histories of consumers. These agencies include the Northern Credit Bureau, Equifax, and TransUnion. The duty of each agency is to collect information from consumer’s creditors and formulate a history report that shows lenders how responsible the consumer is with financial matters. The first step to better credit is contacting each of the credit reporting agencies to request a copy of one’s consumer credit history.

Lenders take credit histories under close advisement because they need to ensure that the money they are lending will be paid back in a timely manner. Those with a history of late or missed payments may present a red flag to lenders and ultimately cause the consumer to lose out on financing approval. Bad marks on a credit report stem from not meeting creditor requirements concerning payments or overextensions of credit. Lenders can, at a glance, make many of their approval decisions based on the credit reporting agency information.

Making Improvements To Your Credit Scores

While unfavorable marks on a credit report can not be erased, it is possible for consumers to improve their credit profile over time. Starting with making regular, on-time payments to current creditors and eliminating the debts of the past, consumers can improve their credit histories and make themselves appear more credit worthy in the eyes of the lender.

Disputing credit report errors, inaccurate information, and working with creditors to clear up past mistakes can all make an impact on your credit history report. Credit reporting agencies have an obligation to only report accurate information and investigate claims of wrong data with the creditor that originally reporting the information. The Canadian government requires that all creditors and financial organizations have a protocol in place for dealing with consumer credit errors and other customer service complaints.

Credit agencies are prone to human errors so it is advisable that all consumers check their credit history reports at least annually and at any time they plan on seeking financing. It is also important to keep tabs on credit histories as in many cases it is the first and only way to determine whether someone is using your identity for fraudulent purposes.

Improve Credit Scores For Benefits

The more you can strengthen your credit background, the more options you will be afforded for financing. First, loan and credit approvals will be faster. Second, financing amounts and interest rates will be more reasonable. In general, more options will be available for the consumer with the stronger credit foundation than for those with imperfect credit histories. All consumers should strive to maintain top-notch credit scores at all time to ensure their financial stability is intact.


Ed O’Brien is a seasoned writer in personal finance, specializing in credit repair. You can find more of his articles located at


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