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Category: How Can I Fix My Credit

  • Rebuild Your Credit in 2020 Using These Simple Steps

    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://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://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://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.

  • Credit Repair Companies and How to Choose One

    deb2Your credit controls a lot in your life. It can impact your ability to get a car, a home, insurance, and some employers will even pull a credit score as part of their reference check. When your credit is not up to snuff, you may find it difficult to obtain even the most minimal credit, and when you do find it you’ll likely be paying sky-high interest.

    This is where credit repair companies enter the scene. Often we try on our own at first to fix problem credit, trying hard to make more than minimum payments in an attempt to pay off debt and work on bringing a credit score back up. However, if you’ve decided that this route just isn’t working, and you need a little extra help and guidance, you may be considering a credit repair company’s services.

    Great. These companies exist for a reason, and that reason is to help average Canadians deal with problem credit. That being said, all credit repair companies are not created equal. While some are fantastic and honestly aim to help you repair your credit as quickly as possible, others are really little more than smash and grab schemers with no intention of actually helping you reach your goal.

    So, how do you choose the one that will truly help? There are certain things to look for, and certain things that should be considered red flags.

    Start online. Check reviews and social media to see what others are saying. Is the company on Facebook or Twitter? Are they active? This is usually a sign that they are genuine since others can post about the company. Activity which includes content that is valuable to you is also a good thing – it shows the company is taking the time to address your needs, whether you are a client or not.

    Does the company have a physical address? Are you able to find them on Google Maps and drive to an office and speak with someone? Can you find the contact information of owners and employees on the company’s website? Those smash and grab companies we spoke of earlier – they are taking money with the promise of assistance and behind the scenes the only thing they are doing is pocketing it. If there is no office, there is no real way to find a person if things go south.

    When you call for a consultation, how many solutions are offered? If there is only one solution suggested, and the underlying factors which led to the problem credit in the first place are not addressed, you may want to go with a different company on the list. The one you choose should be able to provide a plan following a review of your credit and financial profile and a process to follow-up your success.

    Credit repair is about more than just credit. Credit repair may involve changing habits and addressing debts, and these two things require a strategy.

    At DebtCare, we’ll sit down and work with you on a strategy that fits your unique situation, fixing your credit effectively, as quickly as possible. Call us today at 1-888-890-0888.

     

  • How to Fix Bad Credit When You Don’t Know What the Bad Credit Is

    deb1When was the last time you looked, and I mean really looked, at your credit report? Do you even know what it says, or how to accurately read and decipher it? Far too often people end up with bad credit over mistakes and silly things – things that should be easy to fix. Not knowing what your report says won’t help you fix bad credit – you have to start at the source.

    The issue with credit and knowing how to fix bad credit is that most people don’t realize the variety of items which are reported, and that items are based on actions as well as amounts. Having a lot of debt is not the only thing that will lead to bad credit.

    For example, if a bad debt, no matter how small, has gone to collections, this will be reported to your report. A collection item for $200 will have the same impact to credit as a collection item for $2000. In the end, it is the action that is negative, not necessarily the amount.

    Balances are also a trigger for bad credit. Even if you pay on time, every month, having a card close to its limit can lead to a drop in your score. And again, the amount doesn’t matter. A credit card with a balance too close to the credit limit is the same whether it has a $200 limit or a $2000 limit, and a credit card with a late payment is a late payment whether $10 or $1000.

    When you go to the bank for credit and they say no, but can’t tell you why, they’ll likely tell you to contact Equifax or TransUnion – some banks use both, while some only use one or the other, so make sure you get your full Canadian credit report. Once you receive it, work through it, line by line, to determine how you got to where you are credit wise.

    What if you receive that credit report and see that mistakes are what caused your negative standing? You need a plan to address any issues. These will not fix themselves – you will need to do something if you want them removed. Any issues addressed should be documented and any payments or letters sent should be sent by registered mail or courier.

    Once issues are addressed, a resolution has to be initiated with the credit reporting agency – this process too is official and should include corresponding with the agency by registered mail or courier. Don’t leave anything to chance.

    Mistakes on a credit report are one of the most frustrating problems because these large companies have huge bureaucratic processes that can be hard for the average person to navigate.

    Want to learn more about how to repair bad credit or want help dealing with mistakes on your credit report? Don’t want to face those reporting agencies alone?

    DebtCare knows the ins and outs and can get those mistakes removed in a timely fashion. Call us today at 1-888-890-0888.

     

  • How Can I Fix My Credit?

    Fix My CreditWe all know that bad things happen to good people. No one wakes up in the morning wanting to damage his or her credit. Thousands of Canadians have damaged credit, so if you are wondering “how can I fix my credit”, know that you are not alone and fortunately it can be done – and fairly quickly.

    To all those who want the answer to the question “how can I fix my credit”, here are some tips:

    Before you can repair credit you must deal with any past problem credit. First of all, the old adage that bad credit, even bad credit with unpaid balances, will simply fall off the credit report after 7 years is a myth and banking on that happening may leave you disappointed in the end. Before you can repair your credit you must get rid of unpaid balances associated with bad credit. Easier said than done, right? Well, actually it isn’t. There are many programs available to consumers who have outstanding balances on bad credit where you can make settlements at significantly less than what you owe and freeze the interest accruing. Debt consolidation is another realistic option. Leveraging home equity or having a co-signer can enable you to consolidate debt, paying off the defaulted balances.

    Once the bad credit balances are dealt with it’s time to get to work and rebuild. The two best products that can be used to accomplish this are a secured credit card which reports to your credit report coupled with a secured loan like a GIC which will report to your credit and enable you to work towards an asset. Avoid credit products that bear sky high interest and don’t report to your credit report like payday loans.

    Once new credit is arranged to rebuild, how you manage the new credit will be vital. Many misguided consumers think that when they get that secured credit card they should use it and make monthly payments to rebuild. Unlike installment credit (a loan), revolving credit can be good for your credit or ruin your credit depending how you manage it – even if you make your monthly payments on time. If you run up a large balance on your secured credit card and it is close to, at, or over the limit, this will negatively impact your credit. A good rule of thumb is to only use what you can pay in full each month and don’t exceed 50% of your credit limit as a balance. This means that if you have a secured card with a $200 limit, keep your monthly spending on the credit card under $100 per month. How you manage even the smallest credit card is an indicator to future creditors of whether or not you are a credit risk.

    What to avoid: avoid store cards like furniture cards. All too often people buy furniture and get financing on a card offered through the store. If you buy $2,000 worth of furniture and then they get you approved for $2,000 worth of financing – even if it is interest free and even if there are no monthly payment obligations – this will have the impact of a maxed out credit card on your credit report. Avoid making more than 4 applications for credit in any one given calendar year. Credit applications are reported to your credit report and too many will reduce your credit score and make you appear as a “credit seeker” to new creditors. Be careful because many companies will try to look at your credit: employers, banks when opening accounts, gyms, insurance companies, etc. Generally speaking, if you are about to go into a contract with any organization and you are being asked to sign something, read the small print – it could include your permission to access your credit report.

    Now that we have addressed the question “how can I fix my credit”, let’s get started! Contact DebtCare Canada today at 888-890-0888 or visit www.debtcare.ca.