"My credit rating is good"...but will it buy groceries?"

Many clients will say their greatest fear is to take any action which may hurt their credit rating.  But, at the end of the day what really is your credit rating?  The credit rating is set by credit reporting agencies such as Equifax (www.equifax.ca) or Transunion (www.transunion.ca) which gives other potential lenders your past payment history on your loans.  Another part to this puzzle is the credit score.  The credit score is a calculation by the credit reporting agency to basically give a prediction of your likelihood of being able to pay your debts on time and in full.

Coming back to the question about groceries:  What is better, to preserve the credit rating or to buy groceries?  A grocery store does not ask your credit rating before you can take your groceries home.  If you are cutting back on groceries, heat, hydro, clothing or prescriptions just in order to make that next minimum payment, then the time for change is now.

While filing a consumer proposal or a bankruptcy will have a negative effect on the credit score and the credit rating, part of the process is to get back on your feet.  As you go through the process, you will be rebuilding you credit profile.  In the end, when you are ready to consider borrowing again (e.g. a new car) you will be doing so on your terms and within your comfort zone. This is all part of your journey to a long term solution for your debts