Tips on How To & The Importance of Rebuilding Credit

There are many reasons that achieving and maintaining a good credit score is important. If your credit score has dropped as a result of struggling with debt or filing a consumer proposal or a bankruptcy, you’ll quickly realize the limitations it places on you. While 4 Pillars Debt Solutions of Muskoka & Parry Sound assists clients with the immediate challenge of debt restructuring, our agents also help clients to rebuild credit with a look to future financial success.

In today’s world, most people rely on good credit for a wide variety of activities. Let’s face it, certain purchases can’t easily be handled with cash or your paycheque, and even then, often credit cards are required to hold a reservation. Whether you want to borrow at favourable credit rates, get approval for a mortgage, buy a car, or order a credit card, your good or bad credit rating will impact your ability to do so. Without a credit card, for example, simple pastimes like online shopping and car rentals that we often take for granted become impossible.

Credit scores range between 300 and 900. The higher your credit, score the more likely you are to be approved for loans and receive favourable rates. The goal of any rebuilding program is to achieve a score of 650 or higher and qualify for a CMHC approved mortgage. Credit rebuilding is not a quick process, however; it’s a lot easier to damage your credit score than it is to repair it, especially without the right tools and information. Since credit rebuilding is a lengthy process, the sooner you take action, the better off you’ll be. Factors that affect your credit score include:

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 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. “Hard inquiries” hurt your score, as opposed to “soft inquiries”, which are just checks on your file for updates and won’t show up.

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

4 Pillars Debt Solutions of Muskoka & Parry Sound can help you address these issues and succeed at building a stronger credit score. Our credit rebuilding program gives clients the tool and support needed to get back on track and into a position to begin accumulating wealth. The steps 4 Pillars agents will take include:

Assessment. We will analyze your credit score and 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. We will create a customized plan to increase your credit score to 650+ within 24 months, using the best credit rebuilding products in the industry. The plan involves helping you get new credit and using it properly going forward. (Results assume the client successfully executes the program in its entirety.)

Protect Your Credit Rating. As your credit rating improves, it’s important to maintain good habits and avoid the common credit mistakes that can hurt your score. Your 4 Pillars agent will educate you about the potential pitfalls and work with you throughout the process to ensure you’re on track. All your hard work deserves positive results.

Each of these stages involves detailed planning. Your 4 Pillars agent will personalize the program to help you achieve your future credit needs. With patience and discipline you can rebuild, even after bankruptcy.

In the meantime, here are a few simple tips to help you get started right away:

Check your credit report. This gives you a clear overview of the issues and visibility to any inconsistencies or errors that need correction. While it may be depressing and downright stressful to see it in black and white, you are taking action to change it for the better. You are entitled to a free yearly copy of your report from each credit bureau, Equifax and TransUnion.

Make minimum payments by the due date. This may be difficult depending on your current financial status but if it’s possible, it will help you to establish a reliable payment history. Missed and late payments hurt when trying to re-establish credit. Be careful if using automatic bill payments, unless you are confident there are sufficient funds in your account. NSF fees and overdrawing your account are bad signs to creditors.

Create a budget. Financial discipline is required to rebuilding your credit score. Take a look at your day-to-day expenses and prioritize spending on what’s most important. Awareness of your spending and saving habits will give you insight and a greater sense of control.

Contact 4 Pillars. Rather than deal directly with creditors or struggle on as you are, let us advocate for you to restructure your debt and rebuild your credit. With over 10 years of proven credit rebuilding experience, 4 Pillars consultants will represent you and get you the best result.

There is no time like the present to get your credit rating back up and your stress level back down. Contact 4 Pillars Debt Solutions of Muskoka & Parry Sound and begin the process of putting bad credit behind you.