Rebuilding your Credit

Living with bad credit is difficult, as it complicates your life and makes it feel as though you are missing out on opportunities.

Rebuilding your credit, whether you have been through bankruptcy, consumer proposal or made mistakes with your personal finances, doesn’t have to be complicated but it takes patience and a plan. Remember your credit will not be fixed overnight but following the steps below could help improve your credit rating in time. The key would be persistence and patience.

• Obtain your credit report from Equifax and TransUnion and verify that the information is correct. Here is a link to further understand your credit report and score:

• Pay your bills on time. This is one of the most important and easiest ways to build your credit. It will showcase good money management to your lenders and reflect a positive change in your financial behaviour.

• Apply for a cell phone. Phone companies report your payment habits to the credit bureau each month.

• Apply for secured credit card. The management of credit is essential to rebuilding your credit and a secured credit card will allow you to have a credit card and provides the lender with security as you will be required to provide a security deposit in order to be approved. The security deposit can range from $300 to $10,000 depending on your need. Try to not carry more than 30% of the credit limit on a monthly basis. Here are some companies that provide secured credit cards

• Don’t apply for too much credit. Every time you do, it will affect your score. If you are declined once or twice, allow 6 months in between applications. The longer you wait the more beneficial.

• Most importantly: create a monthly budget and live within your means. Ensure to set aside a few dollars for savings. Though savings accounts are not reported to the credit bureau they help establish healthy finances and saving can then also be used for an emergency or as a contingency fund if an unexpected expense occurs.

The following is a link to help you budget and see if you are living within your means: http://www.gailvazoxlade.com/resources/interactive_budget_worksheet.html

For further information on rebuilding your credit please refer to this link with the Government of Canada: http://www.fcac-acfc.gc.ca/Eng/forConsumers/lifeEvents/dealingDebt/Pages/Rebuildi-Reacutet.aspx

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