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Resources relating to credit and debt

Consumer Proposal - What is it? Is it an option for me?

A dynamic and effective alternative to bankruptcy, but still with many of the restrictions of an R7 Orderly Payment of Debt prgram.

A Consumer Proposal is, essentially, a request to the client's creditors to reduce to total amount of all unsecured debt to an interest free amount. The request for the reduction would also include a term which would specify in how many months the reduced amount will be repaid. Once the consumer proposal has been submitted to the creditors through the office of a registered trustee, the creditors will review the request and vote on the matter. The creditors have up to 45 days to review the consumer proposal plus up to an additional 15 days in courts administration. During the time of the vote, there is a stay on all of the client's accounts.

Investing in your Future to advance your Credit Worthiness

Continuation of the 5 steps to Repair your credit

It's a common practice that especially banks will only lend money to those people that don't need it. You need to show your lender that you are responsible with money through showing excellent payment history on active accounts, and that you are continuing to save and invest in your own future. There are added advantages to using investments to improve your credit worthiness.

How to Obtain Credit once Declined

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5 Steps to Repair your Credit - Continued

Believe it or not - the next step to improving your credit is obtaining more, especially if the only history you've viewed on your credit report is not favorable. If your credit history is not too bad in terms of payment history this step may not apply to you.

Tips and Tricks for improving your credit score

Improving your credit score is something that can be done with a few simple steps.

First lets look at the biggest factors that impact your score:

Payment history
  • A clean record of on-time payments per your credit agreement will help boost your credit score.
  • Falling behind on your payments or soon to be falling behind? Contact us before it's too late!
Outstanding debt
  • If you have used over 50% of your available credit you may harm your credit score! If you are concerned about your credit score try to keep your balances under 30% of your available credit.
  • Learn about debt reduction options - we offer free consultation and could give you strategies to imrove your credit worthiness

How to calculate your TDSR

Return to: TDSR Homepage

Now that you've calculated your income and calculated your debts it's time to proceed to calculating your Total Debt Servicing Ratio.

From your income calculation you are aware of:

  • Your monthly income
  • your spouse's monthly income (if applicable)
  • income from other sources like rental income, investments, etc.


From your debt calculation you are aware of:

  • Monthly housing costs (mortgage/rent/taxes/and half of your heating bill)
  • car lease or loan payments
  • 3% of your credit card balances
  • 3% of your credit line balances

Simply divide what you are spending by what you are making and you should get a number less than one - If the number is greater than 0.75 - please give us a call immediately to check your math - you may have an issue moving forward and obtaining credit with a financial institution.

Calculating your Debts - How the Banks see your Debts and Bill Payments

Since you have completed Calculating your income it is now time to take a look at where all that income is going. In particular - how much of your pay is being spent on servicing your existing debts?

Banks and other financial institutions are only interested in the following financial obligations when calculating your Total Debt-Servicing Ratio:

  • Rents / Mortgages - payment amount per the agreement - in the case of Mortgages also add the monthly property tax payment amount
  • Loans - payments per the agreement with the creditor
  • Lines of Credit - 3% of the outstanding balance
  • Alimonies / Child Support / Spouse Support - Full monthly payment amount
  • Car Leases / Financing Payments
  • Credit Cards - 3% of the outstanding balances monthly

The following items WILL NOT be factored into your debt-servicing amount:

  • Bill Payments - The Banks are not interested in your cell phone, utilities, gym membership, magazine subscription or anything other than the items listed above.

How to Calculate your Income - In the eyes of financial institutions

Return to: TDSR Homepage

When calculating your TDSR Total Debt-Servicing ratio the following indicates how income should be calculated:

How to calculate your income:

Weekly pay (every week)
Multiply your average paycheque amount by 52 (pay periods per year) and divide by 12 months to get your monthly income number
Bi-Weekly pay (every other week)
Multiply your average paycheque amount by 26 (pay periods per year) and divide by 12 months to get your monthly income number
Bi-Monthly Salary (1st and 15th)
Multiply your pay by 24 and divide by 12
Variable pay amounts (contract work, commission, etc)
Use a period of 30 to 60 days taking into account all income and figure out your average monthly income

Total Debt Servicing Ratio (TDSR)

The total debt-servicing ratio (TDSR) is used by most financial institutions (creditors) to determine if a client should qualify for new credit. Most likely you wonder how it is calculated and how you can demonstrate your credit worthiness to a bank during the application process.

The first thing you need to do is calculate your monthly income as a household. Banks are always looking at a gross numbers for income. In the case of business owners or self-employed individuals they have the ability to 'back-out' business expenses from their gross income prior to listing it (things like cell phone charges, advertising costs, office space rental, etc.)

The second step is to calculate your monthly expenses as the financial institution will see them. Only certain expenses qualify for the calculation including Rent/Mortgage payments, heating bills, debt payments (according to their calculations), Vehicle expenses, and spousal or child support payments.

Credit Reporting Act - Know Your Rights And How To Protect Them!

The Credit Reporting Act protects several rights of the consumers in Canada:

  • Who can access your credit report and do they need authorization to pull your credit bureau?
  • You have the right to place a statement on your credit report - we can show you how.

Learn about your rights and privacy when it comes to the information contained in your credit report.

Your Credit Score - What is it? and how is it used? (Beacon® Score)

The credit score is a number between 300 and 850 that lenders use to determine your credit rating. The credit score is a snapshot of your credit rating at a particular point in time. The higher your credit score the more likely you are to be approved for loans and receive favorable interest rates. The lower your credit score the higher your chance of being declined when applying for credit.

WHEN you are preparing for a major purchase, like a home or vehicle, make sure you review your credit score and report. Looking at your credit report and score some time before your loan application will help you get a complete picture of your credit worthiness. If you have a concern regarding your credit score or credit worthiness please do not hesitate to contact us.

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Another Successful Debt Settlement...

I must say that I always ‘do my research’ in every area of life as best as I can so that I make the right purchase the first time. Well, this was not an area I was even remotely able to make a definitive call on since my wife and I never had any previous debt issues.
I researched and met up with many different Debt Resolution/Debt Solvers and tried to work with making monthly lump payments but it wasn’t the correct solution and in the end failed for us. I started researching into solving our Debt problems all over again when I came upon the idea of Debt Settlement…that was the correct solution and something my wife and I should’ve done the year before. The problem was who could we trust to do it and who was the best person for the job. That was our newest problem.
I started making calls and looking up as much information as I could get on the Companies that did this and I was confident that Canada Debt Settlement were the tops in this area so I called and spoke to Boaz. I was actually somewhat shocked as he had answered my questions and explained the way it worked so well I had no more questions the next day. This was a relief as the time frame for us was very tight and to this day I am amazed that everything was settled going right down to the wire on our tight schedule and that Boaz still managed great savings for us in the process. It pulled us right out of debt and had we called Canada Debt Settlement the year before we would’ve saved even more and not carried that Debt burden unnecessarily for an extra year.
If you’re doing your research looking for who is the right one for the job, I can honestly tell you save your time and money and go with Canada Debt Settlements. I would be happy to talk to anyone that has any uncertainty as the expertise and hard work Boaz did for us was truthfully incredible.
S.B. of Mississauga
Received Dec 23, 2013 via email
Total Savings: $18,000+

Call now for your free no obligation consultation 1-877-475-3939