Rebuilding Credit – Why Is It Important?

If your credit score has fallen as a result of financial difficulties or filing a consumer proposal or a bankruptcy, you’ll quickly realize the limitations poor credit can impose. In addition to assisting clients with the immediate challenge of debt restructuring, 4 Pillars Debt Solutions of Sudburycan also help clients rebuild credit with a look to future financial success. Improving and maintaining a good credit score is important, and we can help.

These days, most people rely on credit for any number of financial needs. Whether you wish to borrow at favourable credit rates, get approval for a mortgage, buy a car, or get approved for a credit card, the status of your credit rating will impact your ability to do so. Without a credit card, for example, simple activities we often take for granted like online shopping or renting a car become impossible. Also, credit cards are often helpful for larger purchases like furniture, or for placing rental car or hotel reservations.

There is no quick fix for rebuilding credit; it’s a lot easier to damage your credit score than it is to repair it. Having the right tools and information helps, and 4 Pillars gives you access to the products and expertise you need. Credit scores range between 300 and 900. With a higher credit score, you are more likely to get approval for loans and favourable lending rates. The goal of any rebuilding program is to achieve a score of 650 or higher and qualify for a CMHC approved mortgage.

The sooner you take action to improve your credit rating, the sooner you can improve your credit history and get your finances back on track. Factors that affect your credit score are:

Payment history. This is the most important factor. Late and missed payments reduce your credit score and make creditors nervous.

How much is owed. Higher credit balances negatively affect your credit rating. It’s ideal to keep the balance owing below 30% of the available credit.

Length of credit history. A short and/or poor credit history reduces your score. Using credit responsibly over the long-term is your best bet.

New credit applications. Applying for multiple credit cards and loans in a short period of time is seen as a sign of potential financial difficulty, and makes creditors wary. These “hard inquiries” hurt your score, as opposed to “soft inquiries”, which are just checks on your file for updates.

Types of credit. Although the least significant factor, certain types such as deferred interest or payment plans can indicate financial instability.

4 Pillars Debt Solutions of Sudbury can help you repair a damaged credit rating, no matter how bad it seems. With over 10 years of proven credit rebuilding experience, our agents offer clients the support, education, and tools needed to  turn things around and start accumulating wealth. The 4 Pillars process involves:

Assessment. We will analyze your credit score and help you fix any errors that might be affecting it. We will also look into addressing any debts in collection, if necessary.

Create a Credit Rebuilding Plan. Using the best credit rebuilding products in the industry, we will create a customized plan aimed at increasing your credit score to 650+ within 24 months. The plan includes helping you get new credit and use it properly going forward. (Results assume the client successfully executes the program in its entirety.)

Protect Your Credit Rating. Once you’ve starting building a stronger credit score, it’s crucial to maintain good habits and avoid common credit mistakes. Your 4 Pillars agent will teach you about the potential risks and work with you to steer clear of them.

Each of these steps involves comprehensive planning. A 4 Pillars agent will guide you through the entire rebuilding process so you successfully meet your future credit needs. With patience and discipline you can rebuild, even after bankruptcy.

To get you started, here are a few basic tips to consider:

Check your credit report. This gives you an opportunity to understand where you went wrong and gain visibility to potential inconsistencies or errors in your credit report that may need correction. You are entitled to a free yearly copy of your report from the credit bureaus, Equifax and TransUnion. While it is stressful to review your credit history when it’s in bad shape, remember—you are taking the initiative to fix it for a better financial future.

Make minimum payments by the due date. Missed and late payments hurt you when trying to repair credit. Making payments may be tough depending on your current financial status but if at all possible, it will help you re-establish a reliable payment history. Be cautious when using automatic bill payments, unless you are confident there are sufficient funds in your account. NSF fees and overdrawing your account are red flags to creditors.

Create a budget. It requires financial discipline to rebuild your credit score. Awareness of your spending habits will help down the road as you get your finances in order, and also gives you a greater sense of control. Review day-to-day expenditures and prioritize spending on what’s most important.

Contact 4 Pillars. Rather than dealing directly with creditors or struggling on futilely, let us advocate for you. 4 Pillars consultants will represent you, helping you to restructure your debt, rebuild your credit and get you the best possible result.

Poor credit is stressful and financially restrictive, but it doesn’t have to remain that way. There is no better time to start building stronger credit. Contact 4 Pillars Debt Solutions of Sudbury and begin the process of putting bad credit behind you.

Ryan has been with 4 Pillars since 2010, and has personally helped thousands of clients successfully navigate their best options for getting out of debt.