Everyone who lives in Toronto knows how expensive it can be there, particularly when you’re in or close to Toronto’s core. So, it’s no wonder that many Toronto consumers struggle with debt and credit issues from time to time. Sometimes those issues arise from emergencies and other situations that are out of our control. Then again, they might be due to a lack of financial knowledge.
Whatever the cause of your financial woes might be, rest assured that there is a service in Toronto that can help you, otherwise known as credit counselling.
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The Benefits of Credit Counselling
Even though anyone in Toronto can take advantage of the process, credit counselling can be especially helpful for those who struggle with debt or bad money habits. While you shouldn’t expect your money problems to miraculously vanish, credit counselling in Toronto can still offer you the financial knowledge needed to correct them on your own.
Here’s what you can expect from credit counselling in Toronto:
- The option to work one-on-one with a certified professional counsellor
- The option to take courses about debt management and budgeting
- Help with whatever financial emergency you’re going through
- Tips on how to avoid further financial problems in the future
- The ability to reach out to your creditors and resolve collection issues
- Administration of (or advice about) various financial-aid services, such as:
- Debt settlement
- Debt consolidation program
- Debt consolidation loan
- Consumer proposal
- Bankruptcy
Choosing The Best Credit Counselling Service in Toronto
Whether the credit counselling resource you choose is a large agency or a small organization in Toronto, it’s essential to confirm that the counsellors are qualified and reputable before you sign anything or pay any fees.
When trying to find the right service in Toronto, take the following considerations into account:
- Some credit counselling services are non-profit, but others may charge a fee
- Despite this, your first consultation should be free
- If they try to charge you before helping you, be cautious
- Check customer reviews and be sure they have a good reputation for success
- Look for their organization in the Better Business Bureau database
- Certified counsellors and agencies must have a valid license to operate in Toronto, Ontario
Read this to check out more services that can help you get out of debt.
How Your Credit Could Be Affected
Unlike many debt relief options, another great thing about credit counselling is that neither the courses you take or the advice you get will have any effect on your credit. However, there are instances where the services that a credit counsellor can administer may affect your credit score and credit report.
For example:
- As we said, credit counsellors can administer debt settlements and debt consolidations. Both of these services involve reaching out to your creditors to strike a deal that allows you to pay off a significant portion of your outstanding unsecured debt. While these programs can be helpful, they also cause your credit score to drop.
- Lenders in Toronto will send information regarding your debt programs to Canada’s credit bureaus (Equifax and TransUnion), who will update your report and score accordingly. If your debt is reported as “paid in full”, no credit damage will follow. Then again, if your debt is only “settled”, meaning the full outstanding balance was not met, your credit score will be affected.
- Even more significant credit damage can occur when you file for a consumer proposal or bankruptcy.
- Any of these situations can lead to you having bad credit. On top of that, a record of these relief options will stay on your credit report for several years even after they are completed.
- If and when you apply for new credit, later on, lenders in Toronto can see your damaged credit score and report. As a result, they may judge you as a risky borrower and deny your applications.
Interested in more information about credit scores? Click here.
Deciding When You Need Credit Counselling
As we said, credit counselling is a service that anyone can sign up for in Toronto, whether you’re struggling with your finances or you’re simply trying to learn as much as possible so you can bypass such issues in the future. Nonetheless, it’s best to seek credit counselling before it’s too late.
For instance, you may need credit counselling when you:
- Can’t keep track of all your outstanding bills
- Have such bad credit that lenders in Toronto won’t approve you
- Are burdened by high-interest debt piling up
- Cannot find a simple debt solution that’s effective
- Are constantly being pestered by creditors and collection agencies
- Don’t want to resort to a consumer proposal or a bankruptcy
Looking for some ways to improve your credit? Check this out.
Financial Help When You Need It
At Loans Canada we understand that life happens and financial issues can arise when you least expect them, that’s why we’re committed to providing access to the services and products those living in Toronto need.
