I meet Albertans every week who’ve experienced financial difficulties resulting in damage to their credit score. Although the stories about what lead to the problem have common themes, there is a lot of misinformation out there about what it takes to repair credit and get a loan for a car or truck.

In northern Alberta, having a vehicle is not a luxury. Most of us need a car to get to work, take the kids to hockey, ringette, figure skating, soccer, or just buy groceries. It is a matter of survival.

I understand how stressful it can be if you are having, or are worried about having, a problem getting a car loan. I wasn’t born with a silver spoon in my mouth. I wasn’t always a car dealer. My wife and I’ve had several car loans. We know exactly what it’s like to sit across the desk from a guy in a suit, anxiously awaiting the decision if we “qualified” for our loan, or not. It is a feeling I never particularly enjoyed, nor will I ever forget.

Here are few facts you may not be aware of…

As many as 20-30% of Edmonton families purchasing today may encounter difficulty in obtaining the credit approval they need for the automobile they want. A majority of people at some point in their lives will have an issue, be it missing a few credit card payments, slow repayment of student loans, excessive negative equity in their current car, divorce, sickness, or job loss. If it hasn’t happened to us personally, we all have a friend or relative who’s had financial problems. When someone has a credit problem, they are not as likely to shop around for the best deal because they assume their options are limited. This may have been the case five years ago, but not today.

What about all those ads?

There is no shortcut to repairing your credit. It is not easy. It takes work. It takes time. Beware of any company claiming otherwise. Beware of any company making statements that seem too good to be true. The newspapers are full of advertisements saying they can help you. Everyday I hear radio commercials claiming they can help “even if your mama wont loan you money.” Anyone responding to such an advertisement will soon discover, before “they” spend time with you, they want your social insurance number, date of birth, and work history so they can “run a credit check” or “credit bureau”. They do this so they can quickly qualify your application. They will rarely, if ever, spend the time required to actually help you if your application is not approved in the first 24 hours. It is more cost effective to advertise for new customers.

How can you protect your private information and why should you care?

Ironically, one of the problems we encounter when trying to help people repair their credit is the damage done by companies claiming they can help repair your credit. Every time you give out your social insurance number over a website or to an individual to “run a credit check” the inquiry is recorded on your credit file. When banks review your credit history and see several inquiries from different dealers, finance companies, and banks they assume all the other guys turned down your loan and label you a “credit seeker”. The more you try to get an approval, the harder it becomes. Most loan officers look very hard at any application they believe others have declined.