Canadian Credit Repair - Credit Repair - Canada

a good place to talk about links

RE: Credit Repair

Postby victorj » Fri Mar 27, 2009 07:02:59 AM

One more thing to remember is if you are making a minimum payment on your credit card this amount may only be 3 - 5% of the card. If the interest they are charging you on the card is 19% you are not making any headway....you are actually going to grow the balance by 14 - 16% per month. What will that do to your overall balance....

If you have a $1000 limit on your card and you are at $800 and are making minimum payments....it will not take long for the 14% to keep being added to your card thus taking you over your limit or near it within a few months.

You have to watch this because again, if you are carrying high balances or are over your limits on your card this really brings down your credit score.

Victor
Mortgage Broker for Dominon Lending in Winnipeg, www.VictorJanus.com 3 year Variable rate special - Prime Minus 0.25% **oac So do the math, right now your mortgage could be at 2.00%
victorj
Member
Posts: 27
Joined: Thu Feb 05, 2009 12:48:26 PM
Province: MB


RE: Credit Repair

Postby RichardC » Fri Mar 27, 2009 06:59:52 AM

This was a surprise today, the media is talking about bankruptcy, credit card debt and exposing the true cost of minimum payments. I am glad they are finally exposing this for what it is.

http://www.thestar.com/Business/article/609071

Credit card companies should be forced to post a warning on the bottom of each statement talking about the true cost of credit card debt - kind of like cigerette companies do warning you about your health:

WARNING: Making only a minimum payment on this debt every month will take you XX years to pay this off at a total cost of $xxx,xxx.

RichardC
Member
Posts: 545
Joined: Wed Dec 10, 2008 12:00:10 PM
Province: ON


RE: Credit Repair

Postby victorj » Wed Mar 25, 2009 07:24:46 PM

I concur with RichardC. We see people that are carrying high balances all the time. If you carry that balance on an ongoing basis it hurts your credit score. I've been told that you should carry balances of no more than 50% of the value of a card.

Pay it off monthly, at least the minimum, don't go over your limits and if you can't afford to buy it don't put it on a credit.

People are really not understanding how important your credit is. Sometimes things snowball and problems happen but it is easy to wreck your credit but harder to improve it.

Victor
Mortgage Broker for Dominon Lending in Winnipeg, www.VictorJanus.com 3 year Variable rate special - Prime Minus 0.25% **oac So do the math, right now your mortgage could be at 2.00%
victorj
Member
Posts: 27
Joined: Thu Feb 05, 2009 12:48:26 PM
Province: MB


RE: Credit Repair

Postby drunkbeerguy » Wed Mar 25, 2009 05:20:35 PM

I am assuming that anyone making the minimum payment isn't doing it EVERY month, unless they are way over their head in debt. If you have the cash to pay off the entire balance each month, ABSOLUTELY pay it. You will look better since your FICO score will be higher due to your debt ratio being lower (0% compared to 95% of your total credit available). However, if you are having a harsh couple months, you MUST pay the minimum payment. If you have enough to pay 2 X the minimum payment, do it
drunkbeerguy
Member
Posts: 128
Joined: Tue Jun 26, 2007 03:24:10 PM
Province: AB


RE: Credit Repair

Postby RichardC » Wed Mar 25, 2009 04:34:19 PM

Let me dispel some credit myths for you. We have seen thousands of credit reports over the years so I am speaking from experience here. The media and banks have done a remarkable job of hiding the truth about minimum payments.

I have seen so many credit reports where a consumer is making their minimum monthly payments and they have an extremely low beacon score; in the 400 - 500 range. But that is because they are carrying balances close to their limits. Usually 75% or more of the limits on average.

So that’s an example when minimum payers have lousy credit ratings.

If you are a minimum payer and are below 50% of your credit limits your score is probably about average. The best credit scores I have seen are folks that pay off their bills in full each month and never carry a balance.

Your total debt owed on your credit report lowers your score, the more debt you have, the lower your score will go, even if you make your minimum payments.

Remember only making your minimum payments will take about 3-5 times what you owe today and about 15-25 years to pay that off. That means $25,000 in credit card debt could very well take 20 years and over $100k to pay off if you are just a minimum payer. This is exactly the client banks love – they dont really like people that pay off their debts in full every month – they call them the “deadbeats” because they make almost no money off them.

I actually heard somewhere that about 1/3 of banks profits come from minimum credit card payers that carry a balance every month.

Go on a fact finding mission and pay $23 for your credit score from the Equifax Canada website. It’s called score power.

You may also find these articles on credit from our website very useful.

http://www.totaldebtfreedom.ca/articles/article_3.htm

http://www.totaldebtfreedom.ca/articles/article_2.htm

RichardC
Member
Posts: 545
Joined: Wed Dec 10, 2008 12:00:10 PM
Province: ON


RE: Credit Repair

Postby average_joe » Wed Mar 25, 2009 01:32:07 PM

I'll drink to that, drunkenbeerguy.

Cheers
average_joe
Member
Posts: 2565
Joined: Sun Dec 16, 2007 03:58:17 PM
Province: NS


RE: Credit Repair

Postby drunkbeerguy » Wed Mar 25, 2009 01:28:10 PM

Making at least your minimum monthly payment too your credit card company keeps the account up to date. If you DO NOT pay at least your minimum payment, your FICO score starts to drop, as it is reported to the bureaus.

You MUST pay at least the minimum monthly payment.
drunkbeerguy
Member
Posts: 128
Joined: Tue Jun 26, 2007 03:24:10 PM
Province: AB


Credit Repair

Postby rbafaro » Wed Mar 25, 2009 01:20:56 PM

Does making the minimum montly payments on your credit card bills ruin your credit rating or FICO scores? I have heard some people say that making your minimum payments on time every month will actually help improve your credit rating with Equifax or TransUnion-is that true?

robert bafaro
rbafaro
Member
Posts: 1
Joined: Sat Jan 31, 2009 08:14:28 AM
Province: ON


,

Return to Canadian Credit Repair - Discussion Area