If you have a lot of debt or if you have trouble paying your bills, you can get help from a credit counselling service. If you think you may need to file for bankruptcy or file a consumer proposal, you have to talk to a Licensed Insolvency Trustee.
You may also see an advertisement for a credit repair company. But, sometimes credit repair companies can put you in more debt, instead of helping you get out of it.
There are two types of credit counsellors: for profit, and non-profit. They are not the same. For-profit credit counsellors follow the same rules as debt settlement companies.
Both for-profit and non-profit credit counsellors can help you deal with your creditors and past-due debts. But, non-profit credit counsellors have extra rules and codes of ethics they must follow to help to protect the consumer. Unlike for-profit credit counsellors, non-profit credit counsellors are not trying to make money from you.
Non-profit credit counsellors
With a non-profit credit counsellor’s help, you can learn how to avoid the same problems in the future. This can help improve your credit record.
For example, they can help you:
- make a budget
- understand how you got into debt
- understand how to get out of debt
- talk with your creditors to reduce your debt
- make a debt repayment plan
The first appointment to discuss your options is usually free. If you want more help, you may have to pay a fee. If you can’t afford their fee, you can ask for a reduced fee. They may agree to not charge you any fee at all.
To find a not-for-profit credit counselling service near you, contact the following:
Only credit counsellors listed on these websites are accredited. This means they have training and follow rules called a code of ethics.
Credit repair companies
You may think about calling a credit repair company. Credit repair companies are for-profit businesses that promise to “clean up” or “fix” your credit record for a fee.
Credit repair companies can’t improve your credit record or credit score if your credit report is accurate.
Credit repair companies can’t remove information from your credit report just because it makes you look bad. If the information is true, it will stay in your report for as long as legally allowed.
If your credit score is based on incorrect information in your report, contact the consumer reporting agencies and ask them to fix the mistakes [link]. You do not need a credit repair company to do this for you.
Credit repair companies usually do things that you can already do yourself. For example, they may check your credit report, dispute a debt, or fix wrong information.
They may also give you a high interest loan or credit card that you use to pay off your debts. This may help your credit score, but it will cost you money and put you in more debt as you pay them off.