This is a scenario that is often unexpected, and the cause behind confusion and concern for thousands of Canadians. Does it apply to you?
You’ve just paid off that debt that has been lingering for years, whether from a student loan or a credit card that got out of control. Perhaps you’ve accomplished it through sporadic payments, or in one fell swoop through an inheritance. Who cares, right? It’s done, and it is time to build towards the next stage in your life, hopefully defined by savings, financial planning, and a newfound appreciation for avoiding the money pit of owing money.
You then proceed to spend $17 to pull up your credit report, only to find that your score falls into the classification of fair, or even worse, poor. Your excitement about the options to borrow as a result of your new responsible fiscal plan is quickly doused with doubt.
The situation, however, is easily solved. Here are 3 strategies that can help you rebuild a respectable credit score while remaining debt-free:
1) Get a low-limit credit card, and use it wisely
Your recent elimination of debt will serve you well in shopping around between credit card offers, and the minimal spending limit will prevent any temptation to return to living beyond your means. If reasonable charges for essentials (food, transportation, medications) are made consistently, and then subsequently paid in full every month, your rating will be improved quickly. Restricting purchases to under 15 per cent of the limit is also beneficial to incrementally raising your score.
2) Finance a larger ticket item like a vehicle
Companies like Canada Drives are designed to assist Canadians that have a need for a vehicle, but are having trouble matching available financing options to their requirements. When presented with several dealers that are anxious to work with your financial circumstances, consumers then have the ability to secure a vehicle that they are happy with, work out a plan for payments that are manageable, and build a new track record that maps out a path towards credit strength.
3) Enter into a credit solution program that fits your lifestyle
For those who want a little assistance in managing regular payments, a credit rebuilding regimen managed by a third party is often a seamless way of taking the stress out of financial management. Instead of a self-administered credit card, there are financial credit rebuilding services and products available with expertise that continuously assesses and examines a consumer’s credit score on the path to recovery.
In the case of strategies #2 and #3, Canada Drives is able to offer advice, guidance and a range of various options. Give us a call at 1-888-865-6402 if you’d like to talk about your current situation.