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Your 2015 Credit Health Check

The reality of dealing with our finances is that it is an ongoing responsibility. That is why it is so important to keep a watchful eye on how well you are managing them. Keeping track of your credit report is included in this task and can help you make sure things are as they should be. There may be times where you choose to check your report – and why not take the time b to examine the health of your credit moving forward.

As you may already know, your credit score is a large factor in your ability to secure future credit. This is where your credit report can come in handy to help you make sure you haven’t missed anything that may be crucial to your financial well-being. Here are 3 tips that can help you perform a proper credit health check so that you can start off 2015 on the right foot.

1. Get a free credit report

Step one is to ask for a free copy of your credit report. A request like this can be made through either of the Canadian credit bureaus, Equifax and TransUnion. It is actually recommended, however that you request a copy from each bureau, as one report may contain information that the other will not. Therefore, in order to get the overall picture of your credit situation, reviewing both reports is ideal.

You can visit each of these sites for further details on how to order your reports. There will be some personal information you will need to submit in order to verify your identity when seeking out this document. After placing this request, you can expect your copy to arrive in the mail in about 2 to 3 weeks’ time. Additionally, there are also fax delivery options that you can look into as well. It is important to note here too, that the report will not include your actual credit score as this requires a separate set of steps.

As a part of your credit report, you can review any transactions that you been performed over several months. With that being said, you will want to scan your report for any discrepancies and determine if there have been actions taken that you did not perform yourself. This of course may mean that there may have been a mistake made and the wrong information was recorded on your file. As well, there is also the potential for errors to show up that are a result of someone illegally using your card without your consent and therefore you will want to have this corrected as soon as possible so your credit is accurately recorded. Lastly, obtaining your credit report can help you pinpoint areas of your financial history, such as missed payments, that may have led to a poor credit history and this can reveal ways that you can improve your credit movements from there on.

2. Check your credit score

As mentioned, a credit report and a credit score are different entities. Your credit score is represented by a three-digit number, typically falling between 400 and 900. Credit scores are generally considered strong, if they are 600 or over and 750 being excellent.

If your score is lower than what you would ideally like, then this is a good indication that you will need to take steps to improve this number. Paying off your debts and making payments on time will help you get yourself on the right track with this value. Equifax also has a database that stores credit scores for millions of Canadian residents. You can find out from them what your credit score is and this can also be requested for free of charge. Obtaining your credit score can allow you to gain insight into the same information that loan providers are accessing to determine your future loan options.

3. Set up a budget

This may also be a good time to revisit your budget and see if there are ways you can improve this part of your financial management. This is an important task to perform periodically as your financial situation does continue to change over time and the same strategies you may have been implementing before may not be as effective now. Perhaps you have more or less income coming in, your bills may have increased, etc – so there definitely will be the need for a budgeting re-adjustment.

Taking a look at what money you have coming in and going out each month or any significant time of the year is important in order to reshape your budget for 2015. Additionally, there may be some areas where you can cut back and some areas where you have to spend more – so you will want to balance these amounts as best as possible. This may also help you revise your payment schedules and some of your current loans that may also need some adjusting.

Since it is likely that you will need some future credit in 2015, it will be extra important to check on your credit report and credit score, from time to time. Ideally, requesting a free copy of your report should be made each year so you know where you stand, financially. Whether it is something that you think about a lot or you only consider from time to time, your credit report is a very fundamental component of your financial management.

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