avoiding bad credit in 2016
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3 Easy Credit Tips to Get Your Credit on Track in 2016

For many people, the New Year is an opportunity for a fresh start. While there are many aspects of life you can create a New Year’s resolution for, one very common resolution people make is to improve their finances.

If this resolution hits home for you - and you want to improve your finances in 2016 - here are 3 easy-to-implement credit tips that can help get your finances back on track this New Year.

1. Focus on Making On-Time Payments - Every Time

As you may have already heard, payment history makes up a large percentage of how your actual credit score is determined. The reality is that even a few missed payments here and there can have a negative effect on your score. When it comes down to it, creditors want to see that borrowers can keep up with their payments and can reliably pay back their loans.

Sometimes, however, even responsible borrowers can fall on hard times - and as a result making payments on time can be a struggle. This being said, even if you are only able to make minimum balance payments, you should try to pay them on time, each and every time. This will help you raise your credit score much faster. With 3-6 months of on-time payments behind you, your credit can get the boost it needs and can get you back on track in 2016.

2. Keep Your Credit Card Balances Below 35% of Your Total Credit Limit

Another credit tip that you can easily implement this New Year is to manage your credit cards more efficiently. As you continue to keep on top of your credit card payments, another way to ensure you will secure a better credit score is if you also keep your credit card balances as low as possible.

As a rule, you should aim whenever possible to keep your credit card balances around 35% or lower than your total credit limit. If you have a higher credit balance than this, you may also want to make this second tip a goal of yours to work towards. While of course this may take a bit of time, it can be a good way to stabilize your credit and set yourself on a more successful financial path in 2016.

3. Pay Down the Bad Debts First

A third piece of credit advice, that can be easily implemented, is to identify which debts are currently the most burdensome. For example, do you have a loan or a credit source that has a much higher interest rate than the others? Do you have any high credit card debts that are rising above the previously mentioned 35% limit?

Ultimately, if you have many debts, you need to determine which one you need to target first and begin to pay it off. By prioritizing this 'bad debt', you can look at reducing your overall debt and improving your credit rating before it falls even lower.

While there are of course many strategies that can be implemented to get your credit back on track, these 3 tips are easy-to-implement and therefore a great start to get the ball rolling to improve your finances in 2016.

At Canada Drives, we understand that having good credit is not always a reality for everyone. As a result, our services can help individuals access the car loans they need, regardless of their credit score.

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