It’s Monday, the start of a new week.
Ask your embarrassing, silly, or worrisome questions. Come learn and discover without judgment.
How bad is having no credit history?
Will a mortgage lender automatically refuse a home loan, even if one is happy to put down 40% the value of the home? Is job stability and salary even a factor, or there’s a strict requirement for having had a credit card or taken out a loan in the past?
This is “frowned upon”, but some mortgage lenders can work with that, although they will require extensive documentation, proof of income, and may also require other proof (letters from your landlord, from your insurance company, … showing that you’ve been paying on time). You’ll also probably have a higher rate. If you’ve been banking with your bank for sometime, I’d recommend you start here, otherwise, a good mortgage broker (not all of them will know how to deal with that) may help.
FYI, while you don’t have a credit card, some other companies do report to credit bureaus, for example some utilities, cellphone or internet providers. It may be worth it to check if you have a credit file with Transunion and Equifax: you can either request your credit for free on their website (warning: their process is convoluted so they’ll try to sell you their service quite a few times) or through apps like Borrowell and Credit Karma.
Regardless, having a good credit history makes things simpler by standardizing them.
What exactly happens when you go bankrupt?
Why is it that I’ve seen small business owners go bankrupt, and then in a few short years they’re back up and running again, presumably they must have taken loans to open the new business.
Why does going bankrupt not seem to have any long term consequences?
As far as I understand it, the business goes bankrupt, not the individual.
In a sole proprietorship, aren’t they the same thing? That would only apply if incorporated, which most small businesses aren’t.
In that case I think you’re right. Quite a few businesses are incorporated though. Especially in the professional services realm where liability is a huge issue.
