Happy 2020! We’re just over a month into the new year. How are your resolutions going? If you’re anything like the majority of Canadians, they might have fallen by the wayside…

A 2018 survey from Strava found that most New Year’s resolutions only last until the second Friday in January… In 2020, that was January 10.

If your goals have been put on the backburner, please don’t beat yourself up. Recognize that it’s completely normal and the issue likely says more about the process than it does about you.

In this blog, we’re looking at simple techniques to stick to your 2020 resolutions – specifically rebuilding your credit.

Why do most New Year’s Resolutions fail?

Some people say that resolutions never last. But the problem is often in the intention vs. the action. Many people enter the new year with big goals and big plans – that prove to be difficult to stick to.

They try to do too much at once or only set vague goals (like save more money) without thinking about what the daily actions will be.

There’s a better way. Through simple, clear, consistent action you can make big progress on your goals in a way that isn’t overwhelming.

You can also pick goals that give you more bang for your buck. For instance, resolving to fix your credit is a great goal because in turn it:

• Helps you plan your budget.
• Creates awareness around your financial habits.
• Deals with debt.
• And has far-reaching consequences – it’s a goal that will serve you well into the future and can extend into other good financial habits.

If you aren’t achieving your financial goals, ask yourself – how can I make those goals more achievable and realistic for my schedule?

How to Rebuild Your Credit in Three Simple Steps

Want to fix your credit this year? Here’s how to do it.

Step One: Get your credit report

To begin, you need to know where your credit currently stands. Request a copy of your credit report from one of the Canadian credit agencies – Equifax or TransUnion.

When you know your score, you will know your starting point.

Learn more about the credit score range: https://www.debtcare.ca/credit-reports-101-the-credit-score-range-and-you/

Step Two: Get rid of debt that is harming your credit

While there are several steps you can take to fix your credit, remember that we are focusing on the most impactful actions. You want to take the steps that are going to garner the most improvement in the simplest ways.

For rebuilding your credit, that is getting rid of debt.

When you’re carrying problem debt, it’s incredibly hard to rebuild your credit score even when you practice other good habits, like paying your bills on time and in full. That problem debt will still be dragging your score down.

So, step two is finding a way to get rid of that debt.

You could consider:

• Making a settlement with your creditors.
• Paying the debt in full (if you have the funds or can get them).
• Consolidating debt through a debt consolidation loan.
• Filing for a consumer proposal.
• Filing for bankruptcy.

Your method may vary and the method you choose may affect your credit score longer (for instance, filing for bankruptcy leaves you with an R9 credit rating) but the point here is to clear your problem debt through the best option for you.

Learn more about debt consolidation options: https://www.debtcare.ca/your-2018-debt-consolidation-options/

Step Three: Deal with debt that has already gone into default

Beyond current debt that you’re carrying (and hopefully dealt with in step two), you might also have old debts that were never paid – these are called default debts.

And while they may be in the past, they can still be dragging your credit score down.

Your credit report will reveal whether you have default debts. Some of the same methods used in step two can help deal with it — such as a settlement with the creditor or filing for a consumer proposal or bankruptcy (depending on the type of debt).

It’s also a good idea to talk to a debt counsellor to find the best way to deal with any default debts. They can assess your situation and offer advice on what methods are best for your situation.

Learn more about what happens when you default on debt: https://www.debtcare.ca/will-a-creditor-actually-sue-you-when-you-default-on-a-debt/

Moving Forward

Once your old debts are taken care of, new credit habits will be much more impactful. Focus on building good habits, such as always paying your bills on time and in full and not taking on more credit than you can afford.

This mindset will help take your 2020 credit repair resolution and make it a life-long behaviour.

What’s your financial resolution for 2020? Share with us on social media. DebtCare is on Twitter, Facebook, and LinkedIn.

Contact us for help with rebuilding your credit or achieving your other financial goals. We’ve helped thousands of Canadians get out of debt, fix their credit score, and more.

Call 1-888-890-0888 or visit www.debtcare.ca for a free consultation.