Impact on credit rating with credit counselling

February 23rd, 2011 by Questions

How will credit counselling affect my ability to secure a loan in the future.

Posted from: Ontario


One Response to “Impact on credit rating with credit counselling”

, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:

Credit counselling and the debt management plans that they offer will typically result in an R7 being listed with the credit bureau for a maximum of 3 years from the date the debt management plan is paid in full. So this negative mark on your credit will make it more difficult in some ways as the credit is poor, but the other side of this is that you now have no unsecured debt. So the big question that comes from this is what is more important to the lending institution, poor credit or no unsecured debt. The challenge is that this varies from institution to institution.

The interesting part of this is that the debt managemetn plan has the sam impact on your credit as the filing of a consumer proposal. The difference is that while the debt management plan pays all the creditors in full, the consumer proposal gives you the ability to pay a portion of that debt back over time. So you often find that the consumer proposal saves you money, but puts you in the exact same position as the debt management plan. As a result you may find that is an advantageous route to explore.

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