Archive for the ‘Credit’ Category

Credit Repair 101

So you don’t have the best credit record in history. You’ve maxed out cards, missed monthly payments, and “robbed” from plastic Peter to pay plastic Paul. Your financial mistakes have finally caught up to you, and you’ve just found out officially that you have a poor credit score. In most cases, you can recover from your credit mistakes. Make a disciplined plan to repair your credit profile with our Credit Repair 101 tips:

MAKE A PLAN AND STICK TO IT.

You must be serious and committed to making changes in your lifestyle – changes that will bring financial peace of mind. Above all, restrict yourself to absolutely necessary purchases. Borrow wisely. The two most important questions to ask yourself: “can I afford it?” and “do I really need it?” As tempting as it is to cut up all of your plastic, you must maintain responsible credit card use – your new payment history will gradually rebuild a better credit rating for you.

PROMPT PAYMENT

Prompt payment of bills, especially of credit cards, is the surest way to repair your credit rating. As you have discovered, we leave “financial footprints” for all to see. Payment of our bills, both amount and timeliness, are tracked by credit rating agencies such as Equifax Canada and TransUnion of Canada.

SAY NO TO GRACE PERIODS

It’s hard to resist such offers, and because your budget is tight, you naturally want to “legally” skip payments — but don’t do it. It’s a bad credit habit; only a financially strapped customer would fall for this, and you no longer want to send out that kind of message. Pay at least the minimum balance if you are really tight, but ideally you want to pay above that.

ALWAYS TRY TO PAY MORE THAN THE MINIMUM BALANCE

Not only does it polish your credit rating, but it also saves you a lot of money in interest, and makes a huge difference in your eventual goal of debt retirement.

KEEP YOUR BALANCES LOW

This is an important strategy, and one that will reflect well on your use of credit. You want to keep your balance way below the credit available to you.

DON’T SEND OUT FINANCIAL DISTRESS SIGNALS

Avoid excessive inquiries for credit. Do not use credit from one company to pay off credit to another. The creation of multiple new accounts is another red flag that works against you.

MAINTAIN AND USE BETWEEN TWO TO FOUR CARDS

– less that two and it takes longer to create a new payment history. More than four and you look like you cannot manage your debt. Remember – responsible, steady, and reliable use of your cards is your first and best defense against a poor rating.

TRY TO KEEP YOUR OLDEST MOST ESTABLISHED CREDIT CARD ACTIVE

The longer your history is with a certain company, the better it is for your credit rating. This is your most important account. If the interest rate is excessive, contact the company and explain your situation to them. Let them know that you are serious, and eager to maintain them as a creditor. Their goal is to keep a reliable customer, so make that work for you.

CONTACT YOUR CREDITORS

Don’t hide your head in the sand, and hope for the best. Take action. Pick up the phone, and explain your situation. Be upfront and honest. Remain cooperative and calm. Not only will they appreciate your initiative, but also they will be willing to create a payment plan that works for you. By calling, you are showing them that you are a concerned low risk customer. And, by communicating, you will avoid the dreaded collection agency round – a real downer for your credit rating.

SLOW AND STEADY WINS THE RACE

You’ll be rewarded for responsible longtime credit handling. Be patient — the passage of time will earn back your good credit profile. Then, when you do need credit for a major purchase — such as a car or a house – it will be there for you. Once recovered, maintaining a good credit rating takes vigilance, but it’s worth the effort. You’ll be able to live and enjoy a financially stable life.

“You can recover from your credit mistakes”

Credit Repair 101

MAKE A PLAN AND STICK TO IT. – www.calgarycreditrepair.com 

 You must be serious and committed to making changes in your lifestyle – changes that will bring financial peace of mind. Above all, restrict yourself to absolutely necessary purchases. Borrow wisely. The two most important questions to ask yourself: “can I afford it?” and “do I really need it?” As tempting as it is to cut up all of your plastic, you must maintain responsible credit card use – your new payment history will gradually rebuild a better credit rating for you.

PROMPT PAYMENT – www.calgarycreditrepair.com 

Prompt payment of bills, especially of credit cards, is the surest way to repair your credit rating. As you have discovered, we leave “financial footprints” for all to see. Payment of our bills, both amount and timeliness, are tracked by credit rating agencies such as Equifax Canada and TransUnion of Canada.

 -- less that two and it takes longer to create a new payment history. More than four, and you look like you cannot manage your debt. Remember – responsible, steady, and reliable use of your cards is your first and best defense against a poor rating.

 TRY TO KEEP YOUR OLDEST MOST ESTABLISHED CREDIT CARD ACTIVE – www.calgarycreditrepair.com CONTACT YOUR CREDITORS – www.calgarycreditrepair.com 

 Don’t hide your head in the sand, and hope for the best. Take action. Pick up the phone, and explain your situation. Be upfront and honest. Remain cooperative and calm. Not only will they appreciate your initiative, but also they will be willing to create a payment plan that works for you. By calling, you are showing them that you are a concerned low risk customer. And, by communicating, you will avoid the dreaded collection agency round – a real downer for your credit rating.SLOW AND STEADY – www.calgarycreditrepair.com 

MAINTAIN AND USE BETWEEN TWO TO FOUR CARDS – www.calgarycreditrepair.com

Credit Scoring

The credit score, also referred to as a “FICO score,” is a mathematical formulae created by Fair, Issac and Company.

The credit score is used by most companies to decide if the applicant is a good credit risk or not. Equifax and Trans Union will calculate the numbers from the credit report and generate a number between 300 and 900.

A low score indicates a bad risk. A score of 700 or more puts the applicant in the lenders’ good books.

 How scores are calculated:

How Clients Can Improve Their Credit Score

1. Order a copy of the credit report, review it carefully and correct any significant errors.
2. Pay bills on time.
3. If there is a questionable credit history, they could open a few new accounts and use them responsibly, paying them off on time.
4. Avoid opening accounts without intention of using them. Having five or six of the same credit card type (e.g., Visa), is not favourable.
5. Having a credit card or instalment loan can help boost a credit score, as long as the balance is not too high.
6. Keep balance low in relation to available credit. If the credit limit is $10,000, keeping the balance below $2,500 (or 25 per cent of the limit) will improve the score. Balances of more than $7,500 (or 75 per cent of the limit) will decrease the score. Going over the limit has an even more negative effect.
7. Pay off credit card debt instead of moving it around to lower rate cards. Moving balances to other credit cards (i.e., “balance transfer”) and closing an old account can hurt the score.