Happy New Year!!
Make this the year you get your credit in order. Whether your goal is to buy a new home, become debt free and raise your credit score, or just make your payments more manageable, these 20 tips for handling your credit can help get you there.
1. Meet with a Mortgage Specialist. If you’re planning to buy a home anytime soon, meeting with a Mortgage Specialist can clarify what you’ll need to do in order to qualify and qualify for the best rates.
2. Check your credit. You can pull your report at www.Equifax.ca. Your credit score will not be affected if you check your score on this consumer site. When a lender (ie.applying for a credit card) pulls your credit score your score will be affected.
3. Dispute anything that’s incorrect. It may take some time and effort, but removing incorrect items from your report can have a great impact on your score.
4. Don’t waste your time trying to get collection accounts off your credit report. Be aware that paying off a collection account will not remove it from your credit report. It will stay on your report for seven years.
5. Set little goals. Paying off a large balance can seem overwhelming. Setting weekly or monthly goals to pay down your credit can make it feel for manageable, and also help keep you on track when that handbag is calling your name.
6. Pay off the smallest accounts first. It may seem smarter to attack the large balances first, but getting small balances paid off will lower your monthly output and allow you to redirect those funds to other balances once they’re paid off.
7. Or, pay off the account with the highest rate first. Since this is the one that’s costing you most every month.
8. Contact your creditors. It might be that they have a program to help you pay your debt.
9. Negotiate your rates. A call to your creditors may yield a lower rate.
10. Transfer balances. You can make it easier to pay your balances by taking advantage of an existing card with low or no interest.
11. Don’t have a card with a low rate? Open a balance – transfer credit card – This allows you to move expensive debt over to a new card, with a low, often 0% APR, for a set time period.
12. Get a secured card. If you’re trying to re-establish credit after a bankruptcy or after paying off old delinquent accounts, a secured card from a bank can help you build it back up.
13. Even if you can’t wipe out all your debt now, pay down your balances. One of the major factors in your credit score is how much revolving credit you have versus how much you’re actually using. The smaller that percentage is, the better it is for your credit rating. The optimum: 30 percent or lower.
14. Pay your bills on time. It’s the easiest and most effective way to keep your score good, or improve it.
15. If you’re buying a home, don’t apply for any more credit cards without your Mortgage Specialist’s approval. Each application will hurt your credit score.
16. Set up payment reminders. If you’re the type that forgets or overlooks payments, make sure you’ve got it covered. Setting a reminder from the creditor or putting a reminder in your phone can help.
17. Set your accounts on auto pay. You’re less likely to miss a payment if you have it set up automatically to draw from your account. Just make sure you keep enough money in your account to cover the payments or you’ll have to pay overdraft fees.
18. Use cash for everything. Financial experts often recommend this tactic to keep us in check about what we’re actually spending. There aren’t any surprises at the end of the month when you’re only using the dollars and cents you have in your wallet.
19. Think about debt consolidation. Many experts consider this a last-ditch resort because its “quick fix” solution may actually cause more problems down the line. Be sure to read up to make sure this is the right step for you.
20. File for bankruptcy, but only if you have no other option. While going this route allows you to wipe the slate clean, it also has a devastating impact on your credit. Bankruptcy is meant to be a last-resort option but there are certain situations when filing may be your best bet:
•You’re being sued by debt collectors
•Your wages are being garnished
•You can’t pay your bills (due to a job layoff or an unexpected illness)
•You’re in danger of losing your home
Please contact me direct at or by email, David@DavidStoddard.ca
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