School For Debt Relief #3: Rebuilding Credit
The beginning of the school year is behind us; students have settled in and teachers have found their groove. This final blog in our school for debt relief series will help get you back on track for the rest of the school year. Once you have worked out your debt repayment plan, stopped the collection calls and gotten your finances righted, it is time to think about rebuilding credit.
If your debt became problematic in the past, it is highly probable that your credit has taken a hit. Thanks in part to things like missed or late payments, having too much credit or a bankruptcy or consumer proposal, your credit is now very likely at the low end of the scale and you may be finding it very difficult to secure any sort of financial funding. If this is where you currently find yourself it is important to understand that rebuilding your credit takes time, but it is possible.
Here is our list of the top ways to help rebuild credit.
Apply for a secured credit card. With a secured credit card, you make a deposit on the card which the creditor then holds as a guarantee. This deposit, usually equal to your credit limit, lets you make regular purchases with the card without the lender worrying about security. Having a secured credit card shows up on your credit report, letting other creditors know that you are being responsible with your credit and not spending outside your means.
Make at least the minimum payment. This is crucial, as it may be what brought your credit down in the past. It is always a smart practice with a credit card to try and pay off the entire balance each month – that way you don’t accrue any interest and can’t get in over your head. That being said, if you cannot make the payment in full make sure that you pay at least the minimum, or just a little more if possible. Any missed or late payments will just get that score decreasing again.
Don’t apply for too many credit products. Applying left, right and centre for credit is going to make you look like you are a credit seeker – and this implies that you cannot meet your monthly needs. Also, do not have too many credit products. Just because you have cards with high limits without using them doesn’t mean that your credit will be good. Keep limits low.
Review your statements regularly and check your credit report annually. To avoid mistakes and to ensure your payments are always made on time, review your statements monthly and report any errors immediately. This is also a good rule of thumb with your credit report – it should be checked for errors and those errors reported on at least a yearly basis (but not too often either).
Just because you have had trouble with credit in the past doesn’t meant that it has to haunt you for the rest of your life. Use these tips to help rebuild credit. And remember, Rome wasn’t built in a day; rebuilding credit takes time – just be responsible and think before you spend.
For more information about rebuilding credit or for debt relief please contact DebtCare Canada by calling 1-888-890-0888 or visit www.debtcare.ca.