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How To Rebuild Your Credit Rating

How To Rebuild Your Credit RatingYour credit rating has taken a beating. You regularly pay bills late. Sometimes you can’t make even minimum payments. Perhaps you’ve gone through a bankruptcy or the consumer proposal process.

But what now? How do you rebuild your credit rating?

Find Out Where You Stand
First, to see where you stand, get your sactual credit rating  from TransUnion Canada or Equifax Canada.

OK, you’ve absorbed the bad news. If you’ve gone through the bankruptcy or consumer proposals process with a licensed trustee such as Richard Killen & Associates, you would have had some credit counselling sessions that would give you valuable advice about how to manage your finances and restore your credit rating.

Replace Bad Credit With Good
You would be shown, for example, how to use credit wisely. You should buy only what you can afford to pay back and make payments on time. In fact, all your bills should be paid on time.

Simple to say, hard to do. The credit counselling sessions provided by Richard Killen & Associates Ltd. will give you strategies on how to achieve this discipline.

As a credit-redeeming strategy, you might even want to purposely get a loan, though it will probably be at a high interest rate. Just borrow $1,000 or so and make sure you make your monthly payments religiously. Automatic debit from your account is probably the best way to ensure that. After six months or so you’ll be receiving an R-1 rating from this creditor. That’s a start.

But Don’t Go Overboard
The loan-on-purpose strategy notwithstanding, you shouldn’t get too much credit. The more you have available to you, the more tempting it is to use. Having too much credit can also hurt your credit report. So do not fill in too many applications for credit and loans because every time you do, your credit history is checked, which can affect your score.

Get a Secured Credit Card
A secured credit card requires you to have a balance. So, for example, if you have a balance of $500, then you might have a credit limit of $500, maybe more depending on the creditor and your arrangements. In effect, it is a no-risk or small-risk credit card. But the very act of using the card and paying your credit card bills on time will help to restore your rating.

No Minimum Payments
Get in the habit of paying your bills, especially your credit card bills, in full, rather than making a minimum payment and carrying the balance. We can’t stress this tactic too much. It is the key to good credit card management.

There are many strategies you can use to get back to financial health. The best first step could be a free consultation with a licensed trustee at Richard Killen & Associates Ltd., who will help you to understand your options in dealing with credit challenges.

Cure Your Holiday Hangover with Credit Free Fridays

holiday hangoverDuring the holiday season, the joy many of us feel is tempered by our dread at opening credit card invoices in January. Apparently we pay for our pleasures.

We will make New Year’s resolutions and vow to shed weight at the gym and through dieting. Why not put your budget on a diet, embracing the discipline of Credit Free Friday?

This is a movement espoused by personal finance gurus David Ramsey and Canada’s own Gail Vaz-Oxlade. The belt-tightening up here gained steam last year when the Canadian Federation of Independent Business (CFIB) and Vaz-Oxlade announced the launch of the Credit Free Friday campaign.

“Excessive use of credit cards, especially premium credit cards, contributes to escalating consumer debt and hurts small businesses,” explains its. “Credit Free Friday is a campaign that encourages Canadians to take a break from using their credit cards, one Friday at a time, by paying with cash or Interac Debit.”

The site also provides sobering credit card facts (the average Canadian now owes more than $27,000, and that doesn’t include mortgages), advice on how to get involved with Credit Free Fridays, a few debt stories and tools to help manage debt problems.

About Richard Killen & Associates


Since 1992, Richard Killen & Associates, a Licensed Insolvency Trustee, have helped thousands of people resolve their financial problems. With 25 years experience in this industry, our president, Richard Killen, and the rest of our team understand the difficulties that honest people can sometimes find themselves in. This expertise makes it possible to provide you with a service that effectively deals with the issues.


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