The Importance of Checking Your Credit Report
After reading my most recent blog I received a phone call from a young lady name Stephanie, she wanted me to tell her story in my very next blog to make sure that others realized the importance of checking their credit annually.
Stephanie had never ever thought that she should check her Credit Report, so years went by without her checking her report.
Six months ago Stephanie decided to purchase her first home so she went to her financial institution with all her documents to be pre-approved for a mortgage.
At her initial interview with her Financial Planner, Stephanie provided all the information to begin the pre-approval process. The application was submitted to the financial institution’s approval centre. The application came back declined. Both Stephanie and her Financial Advisor were shocked, how could this happen, she had been working for three years to make sure that her RRSP, and Personal Savings were in place, she has been working at the same company for the past five years, so what could be wrong?
Upon further investigation by her Financial Advisor, Stephanie found out she had “Derogatory remarks on her credit report and for that item she was rated an R9.” Well, needless to say Stephanie was upset. Her Financial Advisor suggested that she contact the Credit Bureau to find out what the item was and the name of company.
Stephanie followed the advice and found out that two years ago when she returned her lease car she had made an arrangement with the salesman that if she took another lease from the company she would not have to pay for four new tires. Stephanie did take a new lease with the company and thought all was done according to the arrangements she made with the company. Two months latter she received a letter from the head office of the car company asking her to pay $900.00 plus tax for the cost of four new tires. She wrote a note and dropped it off at the dealership to be forwarded to the salesman. Stephanie never heard from the company again and thought the matter was taken care of.
The Credit Bureau informed Stephanie that she should contact the head office of the company to rectify the problem. When she did, the company told her that she had to pay as they did not have anything in writing and sent her an unsigned letter to say that the bill was paid. Stephanie forwarded the letter to the credit bureau who informed her that they received the information that the bill was paid but the R9 would remain on her credit for 7 years.
The entire process took Stephanie ten weeks and countless of hours going back and forth between herself the car company and the credit bureau.
As Stephanie said if she had the information in my last blog she would not have found herself in that situation. She now checks her credit report every year and advises everyone she knows to do the same
What was even harder for Stephanie is that she had to wait over two months to begin her search for her new home. She also believes that she might have missed out on some great deals because the cost of houses in the area she was looking increased.
Stephanie was one of the lucky ones. She did purchased her home and her situation was at least part of her fault. Think of the others out there who through no fault of their own find that an identity theft has destroyed their credit and that does not only cost them time but also large sums of money to prove that it was someone else using their identity and pretending to be them.
Stephanie’s case should encourage everyone to check their credit report once each year. If, when you do your credit check, you find something you know that you did not do, take the time and work to rectify the situation. Leaving something like this on your credit bureau could haunt you for a very long time and prevent you from purchasing your home, getting a loan, or buying a car. In some cases it could affect you getting certain jobs, getting a place to rent and most recently getting insurance.
Checking your credit annually is not something to be taken lightly. It is something you should schedule. Just as you schedule your annual check up with your doctor, you should have a complete annual financial check up, that should include checking your credit report.
I hope this information will make a difference in your financial life. Keep in touch and let me know how you are doing.
Tessa- Marie Shillingford is the author of Controlling the Debt Monster. She is Personal Financial Planner, with a designation from the Institute of Canadian Bankers, and a Financial Counselor certified by the institute of Canadian Banker. She is presently a Program Facilitator of Financial Literacy at JVS Toronto. Tessa- Marie was employed by TD Canada Trust for twenty years in the retail section of the bank. During her tenure at TD Canada Trust she held various positions interacting with customers of the bank. As a Financial Advisor and Manager of Financial Services she led a group of Financial Advisors in helping customers of TD Canada Trust successfully manage their finances. Details of her book… Controlling the Debt Monster, can be found at http://www.controldebtmonster.com