Half a million Canadians fails to pay back collateral-backed loans

According to a new report by Equifax Canada, the number of Canadians who are late on making their monthly credit payments amounts to more than half a million. As the recession hits communities across the country, the national delinquency rate on credit payments continues to grow.

The credit bureau says that over a one-year period ending May 31 of this year, the number of delinquent credit accounts swelled to 19 per cent. Meanwhile, the national delinquency rate payments overdue by at least 90 days hit 1.52 per cent at the end of May.

On a yearly basis, the average delinquency rates have been growing dramatically in Alberta (26 per cent) and British Columbia (27 per cent), and, on the east coast, Prince Edward Island experienced a 26 per cent increase.

Laurie Campbell, executive director of Credit Canada, an organization that provides money management and credit management counseling, said in an interview with CTV New Channel that one of the biggest problems is an increase in impulse purchases on credit cards, coupled with a decline in the average Canadian savings.

In addition, Campbell made a few suggestions to help people get on their feet again.

First of all, get rid of the debt on high interest cards first, while maintaining regular payments other credit cards. She said consolidating your debts to get a lower interest rate will help, even by putting your debt on your mortgage at a much lower rate.

Besides, Nadim Abdo, an Equifax vice-president, says ?onsumers who skip payments suffer longer-term consequences because of tarnished credit scores.

"When economic conditions get better, whenever that is, if they want to go get a mortgage or get a line of credit - with a negative rating on their credit file, that's not going to help them," Abdo said.