Your Financial Past

Know Your Credit Rating

Before you use your home to build your future, you may need to deal with your past. How you stand in this regard can be determined by looking at your credit rating, and your outstanding debt.

Let's look at your credit rating first. Your credit score is calculated by 3 independent organizations that monitor your borrowing habits. This is the score that the banks look at. A score above 720 means you will qualify for the best possible terms.

Here is the criteria that is used:

• Payment of debts in a timely and predictable manner. Missed payments, even on a credit card, will raise red flags.
• Stability. This can be shown in a number of ways - long track record at a financial institution, lack of "running around" to different lenders, infrequent applications for credit, stable address.
• A clean record as far as staying solvent. Bankruptcy, filing a consumer proposal, or receiving credit-counseling cause the most damage to a credit rating, and it can take 6 or 7 years for these to come off your record.

It pays to know your credit score! Here are the organizations to contact to find out yours:

• Equifax Canada - 1.800.465.7166 - www.equifax.ca
• TransUnion Canada - 1.866.525.0262 - www.transunion.ca
  (For Quebec residents, 1.877.713.3393)
• Northern Credit Bureaus Inc - 1.800.646.5876

If Your Credit Rating is Low

If your score is significantly below the 720 mark, this may not mean you are irresponsible. You may have been laid off, and recently re-employed. You may have recently gone back to school, and incurred a high level of debt. Or you may have had to look after a sick family member. Unfortunately, the credit score won't take any of these factors into account - it is purely driven by numbers and calculated by computers.

Capital Direct is not concerned with these ratings. We know that people who have accumulated equity in their homes have done so through hard work and a track record of making payments to their lender. This is all you need to get a loan at Capital Direct. Furthermore, we can help you use your home equity to pay off out- standing debts and improve your credit rating.

Banks May Not Be Helpful

While banks offer home equity loans, they are not in the business of helping people improve their credit ratings. Their interest is in targeting the segments of the population that make them the most profit. If you are in debt for reasons beyond your control, they won't bother to find out - they'd rather take the easy route and let their computer decide based on your credit rating.

When it comes to home equity loans, Capital Direct takes a different approach. We take only one factor into account - your home equity. We remove the red tape so you can get on with reducing your debt, or with financing your future.

Web site content is for informational or illustrative purposes only and is not be considered or used as a substitute for professional financial advice from an accountant, lawyer or certified financial planner. Click here to view our full legal disclaimer.