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.

Debt Solutions are Available to You, Don’t Get Bogged Down By Debt

David was a 25-year-old honors student fresh out of University with an accounting degree, starting a brand-new job in Muskoka. David was successfully able to get a mortgage loan and begin living on his own on a beautiful lakefront property.

David loved his life. His amazing GPA helped him get his dream job and everything was going great for him. He had a plan to pay off his student loan debt and his mortgage loan, while living and working in Muskoka, but a year after moving into his new home some unexpected events took place.

One day during the winter when driving into town for work, he lost control of his car and was hit by another launching him off of the road. The accident totalled his car and sent him to the hospital for three months while he recovered from the wreck.

David’s recovery in the hospital meant that he was absent from work for three months and because of this his mortgage and student loans began to stack up at an alarming rate due to lack of payments. With no car to drive, David had no way of getting into town for work which meant he had no income to help him pay for anything which began his downward spiral. Eventually he began to receive notices in the mail and was forced to move out of his home.

David moved in with his parents because they lived in town closer to where he worked and he began trying to pay off his debts once he began working again. By that point his debts were racking up and were beginning to make him feel very overwhelmed. He began to wonder if he would ever be able to successfully pay off his debts and he began to question why he was even trying any more. The stress of having such a large amount of debt began to take effect on him and he began to give up on everything.

While talking to one of his co-workers one day at work, he opened up about his debt and how he was struggling to pay off everything since the accident. He told his co-worker that he didn’t know what to do and that he was on the edge of giving up on everything.  His co-worker suggested to him that he try getting in touch with 4 Pillars Consulting Group and told David that they could help him recover from his current financial situation and regain control of his life again.

David got in contact with his local 4 Pillars Muskoka branch the very next day and soon after that, they began helping him layout a plan to pay off his debts, they helped David realize that he was not alone in his current financial situation and with some hard work helped him get a better grasp on his debt and how he could become free of it.

4 Pillars Muskoka can help you with a variety of different services, including professional financial consultation, debt restructuring, budget evaluation for your family or individual needs, as well as asset protection and refinancing recommendations. Once you’re out of debt we continue to work with you in order to ensure that you maintain your financial situation and avoid falling back into debt again. If you or someone you know is suffering from debt and are interested in learning more on how to escape it, give 4 Pillars Muskoka a call and let us walk you through the process of rebuilding and reclaiming your debt.

Debt Consolidation- What is it?

Debt consolidation is a form of debt relief often used to avoid failing to pay interest on an existing debt. It is commonly used by people in order to pay off loans or eliminate their own credit card debt. The act of debt consolidation usually requires the debtor to take out a new loan in order to help pay off a previously existing loan. Essentially, debt consolidation allows for someone to pay off multiple different debts at a time, by shifting them into one debt for them to focus on. Taking multiple different debts and shifting them all into one main focus can help the debtor relieve some stress by not having to worry about multiple companies coming after them for money owed.

Close the Books on Older Debts

Sudbury debt consolidation can benefit the debtor in many ways, which is what makes it such an appealing option for both the individuals and businesses that use it. One of the main advantages of debt consolidation is that doing so can help you close the books on older debts. Being able to pay off your current debts gives you a better reputation and lets other creditors know that you are able to pay off your debts in the event of you needing a financial loan again. Debt consolidation also allows you to reassess and organize your financial planning by moving multiple loans with interest rates that vary, into one main payment that you can put your attention into.

Avoid Bankruptcy

Being able to consolidate your debt allows you to gain better control of your finances, which can then help you avoid bankruptcy. Most people use bankruptcy as a tactic to prevent collectors from coming after them about debt owed. Filing for bankruptcy can ruin your credit score and stay with you for up to nine years after your initial filing. The effects of bankruptcy include the possible loss of your property and other personal possessions.

Bankruptcy can also ruin your chances of getting jobs in the future as well as obtaining a mortgage loan. In other words, filing for bankruptcy can be a ripple effect that ends with you in an even worse financial position than you were in originally. By consolidating your debt, you can avoid having to deal with bankruptcy and make progress in the direction of improving and stabilizing your current financial situation, instead of digging yourself into a deeper hole.

If you’re suffering from debt and are interested in learning more about how debt consolidation works in Canada, give 4 Pillars Sudbury a call and let us walk you through the process of consolidation and reclaiming your debt. We can help you with a variety of different debt management services, including professional financial consultation, debt consolidation, budget evaluation for your family or individual needs, as well as asset protection and refinancing recommendations.