What’s a credit score?

Getting To Know More About Credit Scores

Thanks to more and more people using credit cards instead of cash for buying things, it is no wonder that so many people getting to the credit card debt trap. That is because they are under the impression that they are going to have enough of money to deal with their credit card bills, at the end of the month. But what happens if you lose your job. This is of course the worst case scenario. In that case, survival, looking for a new job and a new pay cheque is going to be your top priority and credit card bills are put away in a drawer. And so you miss out on a credit card payment. That immediately has an adverse effect on your credit score.
So here are some questions answered about what credit scores are and how they are going to influence and affect your credit rating in the future.

You are in Toronto. Equifax is going to have all your credit card information and is going to calculate your credit rating. The moment you pay your bills in time, this information is going to going to your credit record. Consider this to be a way of calculating whether you can pay off your debts in time or not. This credit score is a numerical value.

But who have just come to Canada. You are looking for a job here. Naturally, buying credit cards is not on your top priority list. The moment you apply for a secured credit card, your credit rating is going to start. This credit card rating comes in useful if you intend to settle down in Canada, buy some property and take out a mortgage loan. But naturally, you will have to be able to pay your bills on time.

How to have a positive credit rating?

In order to keep a healthy credit card score alive, you need to follow these steps strictly –

  • Never default on a payment.
  • Do not buy more than 10% of your total credit card limit. This is going to help you keep your budget under control.
  • Consider buying in ready cash down payments instead of buying on credit. This is going to save you from financial headaches in the future.

Question – I wanted to file for bankruptcy, but my advisers on Goodbye Problems advised me to go in for a consumer proposal. Now, how is that going to affect my overall credit score?

Jacob R – Markham

Answer From Goodbye Problems Expert

Remember that a credit score is going to be affected even if you do not file for bankruptcy or a consumer proposal if you do not pay your bills on time. Filing for bankruptcy is the last resort. It means that your financial situation has been mismanaged and you need proper financial management and guidance. But here, we are focusing on your credit score.

Just imagine that you have filed for a consumer proposal. Equifax is going to drop your score to a bad debt. This is about the same score which you got, when your debt was given to a collection agency. That immediately means that you are a bad credit risk.

There are two credit score ratings, which are applied when you file for a consumer proposal. The first one is R9, which is going to be up to 5 years, depending on the consumer proposal period. If your debt is managed by professionals, your rating is going to go to R7. It means that your debt has been negotiated and you are making special payments to get rid of your debts.

All this and more is going to be explained to you by our financial experts At Goodbye Problems, when you contact us about credit scores, bankruptcy and consumer proposals.

Can I improve my credit score, if I make a late payment?

Sonia N – Scarborough

Answer – sorry, that does not happen in banking circles. That is why a credit card bill has to be paid within its given allotted time period. A late payment is going to hurt your credit rating adversely. 35% of your credit score depends on how soon you will pay off your credit card bills. Nobody really knows how credit card bureaus calculate their scores to give you your credit rating. So it is better to pay as soon as you get your bill then to leave it at the last moment when there are chances of your forgetting to settle the payment.

Can you help me to rebuild my credit score? I just filed a consumer proposal.

Victor S – GTA

Answer – yes, we are here to do that for you at Goodbye Problems. This is one of the services which professional credit counselling companies like ours give to our clients. It is going to take a while for you to have a positive credit score rating. But with a little bit of help from us, you are going to build up a healthy credit score in the future.

What is the best advice that you can give me in order to deal with my creditors?

Bert J – Markham

Answer – We at Goodbye Problems are here to give you the best credit counselling advice which can take the form of –

  • Talking about your financial situation with you.
  • Negotiating settlement and payment terms with your creditors
  • Help you get consolidation loans to pay off your outstanding bills. This option may not be open to you, if you have a bad credit score.
  • Making out a financial plan for you with which you do not get into more financial problems in the future.
  • See whether a consumer proposal option is the right option for you. This is after we have seen whether you can and how much you can afford to pay your debts, the credit payment option is going to be accepted by all your creditors.

So talk to us right now at Goodbye Problems and get the best credit negotiation, credit counselling, debt consolidation, debt management, financial management solutions available in GTA today.

We are available at Goodbye Problems

Mississauga 905-272-0090

Alberta 780-901-5572

or you can just fill in the form on our website or query our goodbye problems expert so that our professional team can contact you and give you the right financial advice, best suited to your credit card problems right now!