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Your credit rating is based on a “credit report” kept by a credit-reporting company. These credit-reporting companies collect information about the way you handle your debts. They get this information from other companies you deal with. For example, whenever you get a loan, a credit card or an account for utilities, the contract you signed for those things says the company can share information about you with the credit-reporting companies. The credit-reporting companies use this information to write a credit report about you.
Your credit report includes information about how much debt you have, how you pay your bills (on time, late or not at all), where you live and work, whether you've filed for bankruptcy, and whether you've had a home foreclosed or vehicle repossessed. It also contains detailed information about your credit cards and loans.
Many businesses check your credit report to make decisions about you. A business must have your permission to check your credit report, but usually you must give your consent as part of the application. So, for example, when you apply for a credit card or loan, the credit card company or bank will check your credit report to decide whether to give you the card or loan. Some landlords will ask to see your credit report before renting to you.
Your “credit score” is a number that is like an overall grade representing your credit report. It is on a scale between 300 and 900. Some credit-reporting agencies also use a “credit rating”, which is a number between 1 and 9 that rates how you pay your bills. A rating of 1 means you pay your bills within 30 days of the due date. A rating of "9" means that you never pay your bills. If your credit score is low or your credit rating is high, you may have trouble obtaining loans, credit cards, rental housing or other services. This is one reason it is important to pay your bills and loan payments on time.
Checking Your Credit Rating
There are two credit-reporting companies in Canada: Equifax Canada and TransUnion. You can ask for a copy of your credit report by mail (for free) or online (for a fee). For more information about how to check your credit rating, see the website of the Office of Consumer Affairs. This website also has information about what to do if you want to correct information you find in your credit report.
If you are enrolled in a post-secondary program (education after high school) you might be able to get financial help from the Canadian or BC government. The government provides different types of student aid:
All student aid in BC is administered through StudentAid BC. This includes federal government (Canada) student loans. If you want more information than what you find here, see the StudentAid BC website or the Can Learn website.
To be get student aid you must be:
All public colleges and universities in Canada are “designated”, but so are many other types of educational and training organizations. Some examples are Aveda Institute, the Canadian Flight Centre and Interior Heavy Operator Equipment School. To find out if the school you are attending is designated, search the Student Aid BC website.
To get student aid, you have to show that you need the financial help to go to school. If you are considered a “dependent” student and your parents’ income is above a certain level, you may not be able to get any student aid. You are a dependent student if:
- you have never been married or in a common-law relationship; and
- you have never been a single parent with legal custody and financial responsibility for supporting child(ren); and
- you are pursuing post-secondary education within four years of leaving high school; or
- you have not worked full-time for two years.
You can figure out what StudentAid BC thinks your parents’ contribution should be by using CanLearn’s Parent Contribution Calculator. This applies even if your parents can’t or won’t help you financially while you are in school. To apply for student aid, go to the StudentAid BC website. You can do your application online. Your school might have an office that helps with student aid.
There are some things you need to do after you get your loan:
For more details about what your responsibilities while you are in school see the Maintain your Loan page on the StudentAid BC website.
You have to start paying back your loan, with interest, six months after you graduate or leave school. But the interest on your loan will start as soon as you graduate or leave school.
The National Student Loans Service Centre (NSLSC) will automatically send you a consolidation agreement about 45 days before you have to start repaying the loan. Consolidation just means that you have a date when you have to start repaying the loan.
Make sure StudentAid BC has your up-to-date banking information. You can increase the amount of your monthly payments, or change the day your monthly payment comes out of your account or the type of interest rate.
Generally, you have up to nine and a half years to repay your loan. If you need to reduce your monthly payment amount, you can ask for more time. But remember, if you increase the amount of time you take to pay off your loan, you will end up paying more in interest. Contact the National Student Loan Service Centre to discuss the best option for you at 1-888-815-4514 (within North America), 800-2-225-2501 (outside North America), or use the email contact form on their website.
Your credit rating stays in good standing when you meet the terms of the consolidation agreement and repayment schedule by making your monthly payments on time.
The federal and provincial governments have programs to help you repay your loan.
The Repayment Assistance Plan that can help you if you are having difficulty paying back your loan. There is also a loan forgiveness program for certain professions if you agree to work in an under-served area of the province. There is a loan reduction program for full-time students who have had to borrow most of the money they’ve needed to go to school.
Don’t just stop paying your loan payments! This is called “defaulting” and if you default on your loan, you get charged extra interest and might not be given loans later. Plus, you might have to deal with a collection agency and possibly face legal action. You could also end up with a bad credit rating.
You might have heard that if you declare bankruptcy after graduating you won’t have to pay back your student loans. This isn’t true. When you are discharged from bankruptcy (the point in the bankruptcy process when your loans are forgiven), you will still have to pay back any student loans if you declared bankruptcy within seven years of when you stopped being a student.
IMPORTANT: This page provides legal information, not legal advice. If you need legal advice consult a lawyer.
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