Obtaining a Credit Report is Not a Solution to Bankruptcy in Alberta

Posted by: Krista McDonald on 11/27/2011

The Office of the Superintendent of Bankruptcy in Canada (OSB) maintains a website where you can find research showing that credit card use is a major contributing factor to bankruptcies in Canada.  Yet some Albertans, and Canadians everywhere, who search for alternative solutions to bankruptcy in Alberta engage in the fantasy that more credit can provide such a solution.

As credit card balances mount and the increase in monthly minimum payments due start to eat deeply into your current income, these residents try to either increase their existing credit limits or get new credit. 

In times past when credit standards were more lax than they are today, this was sometimes possible.  With increasingly tough standards, the need to ensure everything in your credit report is accurate is even more important.

Every Canadian is entitled to a free copy of his or her credit report from Canada’s two major credit reporting bureaus – TransUnion and Equifax – once a year. 

Not all Canadians are aware that the credit bureaus do nothing more than organize and report information they get from creditors.  It is surprising how much information on the average Albertan’s credit report is inaccurate or out-of-date.

With a credit report in hand, you can dispute inaccurate information with the credit bureau.  They in turn must get verification from the original creditor.  If they cannot, the information must be removed.

Depending on the amount and severity of inaccurate information on a credit report, corrections can yield a higher credit score.  Higher credit scores mean easier access to credit limit increases and new credit accounts.

There are also credit repair companies out there that can charge a fortune to do what you can do for yourself.  They do have the advantage of experience with what kind of dispute letters work and they will save you time and effort, as it can be a long process.

Having said that, repairing your credit so you can get more credit as alternative solutions to bankruptcy in Alberta is a fool’s game.  We see too many Alberta residents in our offices that blur the difference between credit and cash. 

If you are using credit to pay bills on a regular basis, you are setting yourself up for disaster.  There is no way to say this diplomatically.  People fool themselves into believing things will get better for them and then they will attack those monstrous credit card balances but unfortunately, for most, that day never comes.