With 2020 right around the corner, many of us are gearing up for the New Year and getting ready to seriously focus on long thought out resolutions. We want to improve certain things and take on others in an attempt to improve our overall quality of life. Certainly, personal finances are a serious consideration for all as the new year approaches. We want to improve our finances in an attempt to enjoy life and the many great things it has to offer, and there are many. You might want to connect your personal credit along with your ambition of striking it rich in 2020. This is the very best time to consider the New Year resolutions you want to make about your personal credit. Here are a few ideas you might want to seriously consider to ring in the New Year:
1. Order a copy of your own credit report, and read it from front to back, thoroughly.
Have you even seen a copy of your credit report, ever? You can obtain a free copy through any one of the two credit reporting agencies in Canada. You may contact either Equifax.ca and/or TransUnion.ca, to request and obtain a free copy of your credit report. The free report will detail your creditors, your credit activities, credit details for each account…. The free report unfortunately excludes the beacon score, but for a small fee, either agency will send you a credit report and your beacon score. Once you take delivery of the report, take some time to read through it and ensure the information is correct and accurate. The information in the report is arranged similarly by each agency, and it is more or less straight forward to understand. You will also have a guide to help interpret all components of the report. This is a great to start the credit resolution.
2. Ensure there are no discrepancies or issues in your Credit Report.
As you read through your credit report, it is extremely important to take note of any errors, discrepancies and unusual activities/notes/dates. You want to ensure all of the information about you and your credit is correct, accurate and current. The next creditor to access your report will then have the most recent & correct information about you, which will help with their decision in granting you credit. Also, you want to be certain there are no suspicious activities and your identity has not been compromised. Identity theft is a very big problem and can claim anyone of us at any time. It is best to be proactive and focus on protecting your credit and your identity, because if stolen and ruined, it will take years and thousands of dollars to claim back your innocence. Contact the credit agencies directly if you notice any issues with your credit report.
3. Bring all of your accounts up to date.
Hit that reset button by paying all accounts that are slightly behind, in arrears or in collections, up to date. Do whatever it takes to get the funds necessary to do this. It is critical to eliminate any items which are showing derogatory or in collections, in your credit report. This will kill any chances of getting any credit down the road. Derogatory credit and collections are a black eye, and creditors will steer clear of you. Try and bring your accounts up to being current and start your new year. You must commit consistently on a monthly basis, make payments on time, even if the very minimum payment at least. Further, then try and chip away at the balances each month until they are all paid in full. Only use credit when absolutely necessary.
4. Set your limits and ground rules.
It is a great idea to set the ground rules to using credit. You might want to reflect on the types of situations where you might have foolishly used credit and regretted it. Try and focus on how you will manage your purchases down the road. The best way to create focus is to ask yourself questions. Do I really need this? What alternatives do I have?... It is easy to buy now and pay later, and so many get stuck in this patter. In the end, credit runs out and all we have is a large bill staring right at us. Some rules you may want to adopt may include:
Remember, your credit should be protected and treated with the highest regard. Credit is important and allows us to maintain a certain standard of life, especially with the uncertainty we can find ourselves in very quickly. Credit also offers us the ability to take advantage of potential opportunities we make come across but do not have the funds to pursue. The list can go on. As one can see, the benefits of having and maintaining credit are numerous and critical to maneuvering through this financially complex world.
Create rules for yourself and how you manage your credit. Have a game plan, set your limits and you will see amazing results.
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Silver Hill Blog
Jim Horvath is the principal broker and director of Silver Hill Mortgage Corp., arranging mortgage loans for over 25 years.