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Few Important Facts About Your Credit Score

Your credit report statistics shows what your credit score is. Your credit score isn’t stored with your credit report, but it is generated at the time when there is a request to your credit report.

Why credit scores are used?

At the time you apply for a loan the credit score effectively tells the lender based on a score rating, your ability to repay the loan based on your previous payment history, and your current credit status. Everyone from banks, auto dealers and mortgage companies utilize this method of credit rating to determine the risk.

There are other factors when applying for a loan or purchasing a car that includes an applicant’s income, length of employment etc. Many times additional household income is taken into consideration as well. The purpose many times for this is to account for the possibility of a co-applicant being added to the loan should the primary applicant’s credit history or score or length of employment fall short of meeting the requirements for the loan.

What can impact a credit rating or credit report?

The number of late payments made to a creditor.

Charge-off accounts.

These are accounts where payments were discontinued by the borrower leaving a remaining balance that was never paid off.

The total amount of debt. Inquires made recently against your credit.

This can be a flag to a lender if there are a great deal of inquiries on a person’s credit report suggesting to the lender that the applicant is making a great deal of attempts for a loan and can be increasing their debt in the very near future. This will affect the Debt to Income ratio as well as the credit score that many lenders consider, and this can result in a delayed or declined application.

There are regulations in place that protect individuals from the type of information that can be used in evaluating a person’s credit worthiness. The Equal Credit Opportunity Act does not permit race, color, religion, national origin, gender, age, marital status or receipt of public assistance to be used as any determining factors.

As always remember credit is a liability and the best practice is to apply it wisely.


How Important Is Your Credit Score?

How Important Is Your Credit Score Canada

How Important Is Your Credit Score

Generally most of the people don’t care about their credit score in the first phase of their life after turning 18; although it’s the perfect time to start thinking about the things that make life easier for them to enjoy the benefits of financial freedom throughout their life. If you start doing it right from the beginning, it’s like you will be building credit history from scratch naturally without spending money, any pressure and or effort on your side. If you are a person that may not using credit cards and use to purchase things on cash and or never get involved in any kind of transactions like buying a house and or getting a mortgage then it can make you think that credit score may not important for you; it’s wrong.

Your credit score not even determines your ability to borrow money, applying for a mortgage or purchase something on credit but it can affect other things of your normal life. Your no, limited or poor credit score adversely affects you in getting a job, taking an apartment on rent and every other things of life which require accessing your level of responsibility. Moreover, it also determines your insurance rates and interest rate you will pay on your credit and loans.

How important is your credit score when applying for a mortgage loan

Buying a house is one of the largest investments that can bring huge savings to the creditworthy class of potential borrowers, as they are awarded with the lowest interest rates. Sub-prime borrowers are those classes of people that hold poor credit history, face high interest rates with less possibility and choices. Your credit score is an important calculating factor when applying for a mortgage loan but lenders may also consider number of other factors such as income, savings, debt-to-income ratio and large down payment from borrowers.

How important is your credit score when applying for a job

In response to your job application most of the employers now have adopted the policy to check your creditworthiness to determine your level of responsibility. Can your credit score affect getting a job? Yes, if your bad credit history makes a negative impact on getting a job then even your no credit profile can make the employers uncertain. Good and or an excellent credit score can help you in getting a job; remember, your credit check through your employer for the purpose of job screening would not impact your credit score.

How important is your credit score when renting an apartment

For all those people without a home ownership obviously go after renting an apartment. After getting your rental application for an apartment the potential landlord will generally run a credit check to see your credit history. Your credit report and credit score will help the apartment owner in determining how responsible person are you in paying your bills, whether you have positive debt to income ratio and your rental history with the previous landlord; if any.

Your credit score Canada is the most important factor that affects your life, your negative credit rating will stop you in many ways to enjoy the benefits of being creditworthiness and on the other hand your positive credit rating will definitely let you enjoy your life without a break, confidence and savings, but it require your continues struggle to not even maintain a good credit score but improve it to an excellent credit score to get more advantage of the system. How to improve credit score fast? Is difficult, as it will take time; For those that hold bad credit score, they should begin improving it without a delay, as there are many ways to improve your score; Credit Repair Canada? Credit repair loans vs secured credit cards, you can get on the right path if followed seriously. The very best and productive thing is your realizing the fact; how important is your credit score.


Canadian New Mortgage Amortization and Refinance Rules Effective July 9, 2012

New Changes to Canadian Mortgage Rules Effective July 9, 2012In reference to the increased debt burden of Canadian family, Canadian government has been taking various measures to stop further increase and reduce the recent debt load as it was experienced high as 152 per cent debt-to-income ratio in February, 2012. Real estate is one of the major areas where it should require a great concern of a government to take efforts to safeguard home financing and interests of home buyers / owners. The federal government is once again going to tighten mortgage-lending rules to soften down the overheated housing market and increased household debt crisis. Mr Jim Flaherty, Minister of Finance, announced new mortgage amortization and refinance rules, according to him these further adjustments to the rules for government-backed insured mortgages will bring down the overextended pressure of households and will help in making the housing market strong in Canada.

Here are the new changes which were announced by the Federal Government for insured mortgages type. These new rules will be effective from July 9th, 2012 are:

  1. The maximum amortization is reduced from 30 years to 25 years. This amortization period reduction will help Canadian families in reducing their total interest payments towards their mortgages, which also means faster build up equity on homes and paying off mortgages. It’s the third time the Harper government has reduced the maximum amortization period in the last four years to make it easier for Canadians to buy homes.
  2. Availability of government-backed insured mortgages to homes is limited by its price; properties purchased for over $1 million are not eligible for mortgage insurance.
  3. Reduce the maximum loan to value ratio on refinances to 80 per cent from 85 per cent. It means now the maximum equity homeowners can take out of their existing home when refinancing is 80% of the value. It’ll promote saving via home ownership and also encourage homeowners to manage borrowings through their homes.
  4. Maximum gross debt service ratio has been fixed at 39 per cent and total debt service ratio at 44 per cent. This will result in better protection to Canadian households in case of an increase in interest rates or sudden economic problem.

In the words of Minister Flaherty, “Our Government stands behind the efforts of hard-working Canadian families to save by investing in their homes and their future”. These adjustments will help Canadian people in realizing their goals, making it easy to purchase homes beside will help in reducing the threat of debt to personal disposable income ratios reaching up to the toxic 160 mark, the rate that caused a major downturn in economies of America and Great Britain. For more detailed information on the update, please visit www.fin.gc.ca


Canadian Family Debt-To-Income Ratio Hits Record High

Do you know your debt-to-income ratio? Find out and know your creditability and if its worst like most of the Canadians then improve it without delaying.Does the year 2012 of borrowing trouble? Family debt-to-income ratio hits record high in Canada! Debt rises 78% in last 20 years, according to The Vanier Institute of the Family 12th annual assessment of Canadian family finances report; the average Canadian family debt including mortgage loan has reached $100,000. The average Canadian family debt-to-income ratio has now hit a record 150% that means Canadian families owe $1,500 for every $1,000 in after-tax income. We are not going to discuss here about what happens next year, because it comprises lot of inside economic indicators and out side world crises as USA and UK are also reflecting nearly same negative trend. Yes, we have got a positive thing with us that benefit all the individuals, we still have a very low interest rate in Canada and it feels that Bank of Canada want it to continue it’s low rates in 2012. Time will definitely disclose about the report how much it compares of apples and oranges. Dealing with a high debt to income ratio is not very difficult and as a sensible individual you have to safeguard your personal finances by reducing your extra spending and saving for the future, and you can do it. Lets discuss our monthly personal and household spending in relation to our income that demands us to reduce our debts with a productive option of saving into investments.

Simple spreadsheet that will help calculate your debt to income ratio.Do you know your debt-to-income ratio? People usually want to use the debt to income ratio calculator, although Its a simple calculation that an individual can do it by using excel spreadsheet or by hand, it will help you in finding out how much you’re paying in relation to your earning each month and whether your ratio of debt to income is acceptable or high. Debt-to-income ratio is a percentage of your income you owe in debt or debt payments and its one of the best ways to know whether a person is in a good or bad financial position. You require a good financial position to borrow money, spending too much on debt and other financial commitments will result in bad credit, it will drop your creditability and a chance to get credit when in need. All the banks, financial institutes and lenders require your debt-to-income ratio to determine your ability to repay debt, lower ratio means you hold better chances of repaying your debt. Where higher ratio means you would consider being a credit risk that could result in dis-approval of your loan or mortgage. There are various lenders specially dealing in mortgages also calculate Gross Debt Service Ratio (GDSR) and Total Debt Service Ratio (TDSR) to analyze your affordability to take an additional debt. In view of various financial experts, your debt-to-income ratio should not exceed one third of your gross income.

You probably have taken some kind of debt in your life and it’s quite normal, whether it’s a mortgage, credit card, car loan, student loan, payday loan, personal loan, or any sort of due bills you may have. Debt can be divided into two types in relation to rate of interest, high and low interest rate debts; Where credit cards and payday loan debt belong to high rate of interest and these are the debts you should always consider to pay off as soon as possible, preferably before due dates, that way you can save your self from getting into speedy and extra debt burden.

Reducing your debt mean saving that you can further invest to get more future benefits, there are great number of individuals that prefer investing their money into government backed investment offers to get high interest savings programs like Tax Free Savings Account (TFSA), Registered Retirement Savings Plans (RRSP), Guaranteed Investment Certificates (GICs), Exchange Traded Funds (ETFs), Stocks, Bonds, Mutual Funds and other to enhance and save money for various future tasks and most probably for retirement purpose. Here you can get benefit from your lower rate debts while investing them into those investments, which deliver higher returns. It is further advisable to all the individuals to consider all the factors before making decision to go with these benefit programs because there are two possible things you must consider; you should calculate difference between your investment rate of return and interest rate over your various debts. A positive difference between two will help you in making your decision, if paying off debt would help you in reducing your financial burden while enhancing your monthly saving amount then it’s a best deal to consider.

Personal debt management is not difficult because you can easily manage your own debts according to your situation and priority but if you follow the ways how professional debt consultant do it, then their suggestion help you a lot in many ways like;

  1. Start paying off similar kind of debts of smaller in amount and interest rates, it will reduce your burden having various credit and you know these kinds of debts are easier to pay.  After paying off one debt individual can get more satisfaction and courage to start concentrating on the next debt amount to be paid.
  2. Paying off one big value debt having higher interest rate like credit card repayment require your most urgent attention, as you know interest occurring from the credit card is very high and payday loan late payments can charge you with penalty and high fee, don’t delay in paying off these expensive debts. This strategy will definitely enhance your satisfaction, creditability and more handy cash that let you concentrate on the other debts to reduce.

As an individual you have variety of options but choosing one best may determine by your own convenience that’s why go with the option that satisfy you a lot. If you are facing poor credit rating, you will observe when you start paying off debts to your lender, your credit rating will improve having lesser debts. It will also help you in getting your desired low rates big loans for your various types of future investments.

If you’re struggling with your credit card debts and other high interest rates debts and want to adopt better ways to manage your finances then credit counselling could be a right solution for you. You are also advised to consult with your debt consultant; there is variety of debt relief Canada websites available online today where you can get free debt help and analysis, and if it satisfy you, you may ask them their full help.

Lowering down your high debt-to-income ratio is not an easy task, but you still have a great option to lower it accordingly because its not in hands of other than you, take responsibility of your personal finances, educate your self, control your spending habits while purchasing smartly only things you need most, stop your frequent credit cards usage. You will be surprised yourself to find out about how changing your habits will improve your money management skills and help you reduce your debt.


How To Get Free Credit Report Canada With My Credit Score

Why do I need to check my free credit report Canada with my credit score?

Learning the basics of the credit report process helps you in maintaining your good financial health because credit bureau collects and maintains how you are doing with your financial responsibility, and to provide it for the people and the organizations who need to find out, have direct concern and interest in your financial history like your employer, business partner or a lender, where your credit score shows your credit risk or advantage. Its a number that has been calculated through a mathematical formula  that measure through assorted variables in your credit report such as your payment history, public records, and debt to income ratio. Here in Canada, according to Equifax’s ScorePower Report, FICO scores range between 300 (bad credit rating) and 900 (excellent credit rating), where lowest number shows you have been suffering from a critical and a bad credit situation likely to default and high credit score brings more and more advantages, like if you are applying for a loan your interest rates depends on it, rates will be higher if your credit score is low and in case of high credit ratting you will get best possible lower rates. The one big investment is your mortgage and most of the people know how good score has brought thousands of dollars in savings to their mortgage repayments. Your  Credit score brings an instant summary that holds just three numerical digits to know your creditability.

Getting a free credit report in Canada holds more advantages for Canadian residents in relation to the American residents but lot of people here in Canada even don’t bother to check their credit profile, this may also be possible that they don’t know if they are entitled to a free credit report or not. Although you will be offered a free credit report Canada but it doesn’t mean that it holds your credit score rating attached. Possibilities are, you may or may not get your credit score with your free credit report, “How To Get Free Credit Report Canada With My Credit Score”, lets clear this phrase.

There are lot of options you may order your credit report, like by phone, fax, e-mail, general mail or online form but getting your credit report at your physical address through your mail request and instant delivery through internet media are the safest and easiest methods.

By mail its free! The credit-reporting agencies will provide you, by mail, with a free copy of your report on receiving your request in writing. Getting a free credit report this way will not provide you with your credit score and it also take some days to reach you.

By Internet some fees apply! You can also order your credit report through TransUnion and Equifax Canada from these reporting agencies’ websites online. This method is quite easy, safe and fast since you will receive your credit report online almost instantly, may take just few minutes after you made your request and other good thing you will awarded with your credit score too. However, these credit-reporting agencies charge a small fee for providing you with an online copy of your credit report and score.

How to get free credit report online that contains your free credit score?

The only way you can obtain your credit score through online applications supplied by these two credit reporting agencies’ on their websites. The fee charged for your credit score might be higher than the cost of receiving your credit report online. However, the cost of your credit score will always include an online copy of your credit report. Moreover, your paid credit report subscription also includes several other features these companies may have but common one is offering you your credit identity protection. The intention of writing these few sentences up are just to make it clear for you that free credit report with free credit score can only be obtainable through these credit reporting companies online, TransUnion and Equifax Canada and it does hold a cost. Now question stands here then how this advertising media is using the phrases free credit report Canada like “free credit score Canada” “free credit report Canada online”, “free credit report Canada Equifax”, “free credit report Canada TransUnion”, “Equifax free credit report Canada” and more like these.

You know how this advertising environment have been so tighten enough today when we have plenty of platforms to select products and services we require and this kind of market behavior and customer’s trend in finding opportunities the main suppliers, producers and marketers are just trying to reach their market and consumers beside trying to balance their own business competitiveness, such kind of aggressive statements that looks golden opportunities, make them prominent to be readily click-able are not false but it require some limitations attached. That’s why (Federal Trade Commission) FTC new rules implemented early this year in America to restrict such free credit report offering through these credit reporting agencies to safeguard consumers interest from such free credit report scam happening by printing these sentences as bellow:

THIS NOTICE IS REQUIRED BY LAW. Read more at FTC.GOV.
You have the right to a free credit report from AnnualCreditReport.com or 877-322-8228, the ONLY authorized source under federal law.

Its compulsory by law to print this above statement on the website’s web pages that contains such free credit report offering and those companies could face fines for not expressing full disclosure about free reports. Although its an American rule for the American websites but we should adopt it on ethical grounds till its not come up as a legislation. How this is true we can have our credit report in Canada free online that holds our free credit score?

You will find several websites offering you a 7 days, 15 days, 30 days or else free trial period for their such services, which offers you to view your free credit report in Canada online for the said period and after expiring you must sign up to carry on using the same service as paid one and some also offers the same free trial service if not canceled before the expiry of the said period you automatically becomes there paid member to be liable for the paid subscription. That’s why always carefully read first about the terms and conditions for the said free Canadian credit report offering, you are going to sign for. Some people will use the same service to view their free credit report in Canada and then just cancel their subscription or a membership before the expiry of the said period.

This is how to get your free credit report Canada that also holds your free credit score, its a good way but you have to remember to cancel your membership with the said company before the free trial period will be up, otherwise they will be start charging you for a service that you no longer been using.

The Canadian credit reports and scores offering system in Canada is very similar to that in the United States, like we both have two common credit reporting agencies working among us, which are Equifax and TransUnion (Experian, the third one has closed its operations in Canada on April, 2009). But there is, however, one main key difference that brings more advantage to us in Canada, is that, unlike the United States, where a consumer is allowed only a single copy of annual free credit report once in a year, in Canada the consumer may order a free copy of their credit report as many times in a year he/she may without any restrictions but as long as the request is made in writing for the printed copy to be delivered by mail. You will find printed statistic on your free credit report that how many times you have received such copies and good thing is this, it doesn’t bring any effect on your credit score.

For more information on how to build or improve your credit history, and how to check for signs of identity theft along the sample credit report Canada and credit score documents you may visit Financial Consumer Agency of Canada. The Government of Canada offers a free publication called Understanding Your Credit Report and Credit Score that you can read online free there, you may also order a hard copy of said publication that is available free of cost to residents of Canada.

View your Free Credit Reports in Canada in seconds!

free credit report canada and free credit score canada

Role Of Bad Credit Personal Loan In Today’s Economy

With the present state of the global economy being what it is, most of the Canadians with the other developing nations are also finding themselves in bad credit situations. Demand of personal loan has increased money wise. This cash shortage may be due to difference between our earning and spending beside routine payment schedule on our previously taken personal loans, car loans, mortgages and credit card debts. Although Credit report mechanism is efficient in collecting data of our transactions but it is not programmed to tolerate to adjust anyone in the light of personal problems individually or economical problems as a whole because even delay in your single payment beside prompt payment history may announce you a bad creditor because lot of people having good payment record already have gone in a poor credit situation.

Although we are heading towards economical recovery, our last months stock market have shown a nice upward trend in relation to last several months beside job market is still under observation, savings and investments are not materializing, credit card users are expecting some more hard changes in near future. Perhaps first phase of economic recovery needs sacrificing of some of our needs and that an ordinary people have been going through.

What if some one needs a fast credit if an emergency arises? General banks will not compensate your loan request if you have crossed your debt to income ratio according to their policy and asking for a short term loan till your next pay check and people with bad credit aren’t likely to be approved for a banking loan. The good news is that you are not alone here looking to remove your financial worries without any option of hope. Instead, look for a private lender that will grant you a loan, you will find secure and unsecured credit both.

Short term and low amount of credit need like a payday loan or cash advance is granted looking at your regular job and its unsecured in nature and if you are looking for a longer term with more cash requirement then you could get a secured loan based upon collateral.

Moreover, if you presently have bad credit, taking out a new loan might not seem too wise and there is really no such thing as a quick credit fix. Unfortunately, credit don’t take only months but sometimes years to repair that only require your persistence approach towards your commitment.



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