The Cost of Bad Credit

A good credit score is an important thing to have but it’s difficult to maintain. Living without credit or bad credit is becoming more common and most wonder what the big deal is if I have a low credit score?

Credit card payments and the level of debt have the most impact on your credit score. The information contained in your credit report is also used by many financial calculations. This means that a lender will not only view your credit score but will combine your monthly minimum payments reported by your creditors and compare it to your monthly gross income. This is known as a debt to income ratio and is as important as your credit score.

If you’re deep in debt, living paycheque to paycheque or are constantly charging things on your credit card, this will make your life extremely difficult from getting a job, your children following in the same footsteps to getting a place to live.

Here are some of the costs of living with bad credit:

1. A big consequence with having bad credit is the denial for a loan. Being denied for a credit card or being denied for a home mortgage when you need it will not only cause you to get denied but it will also be embarrassing for you and affect you emotionally.

2. Creditors and lenders will view you as a higher risk and because of this you will be paying for that through higher interest rates. Over time you’re paying a lot more than if you would have should you have had better credit.

3. When you want to rent a home or apartment, you may be refused as most landlords will check your credit prior to offering you the lease. If you have poor credit, the landlords will think you’re less likely to pay them and will refuse you.

4. If you have a history of living without credit that is good, you will require to pay a large security deposit for things such as utilities and cell phones.

5. The decisions you make will affect your children. They watch what parents do and financially and there is a great chance that they will follow suit.

6. Another big consequence that will directly impact you and your family is worry and anxiety. This kind of stress can lead to all sorts of health issues for you and even cause problems in your family life.

Poor financial decisions can ruin your credit fast so if you want to maintain an impressive credit score or you want to improve it, make your payments on time and include a little extra each month to help pay down your debt. Keep all your accounts open as an open account without a balance is more beneficial than a closed one and also don’t open any new accounts.

For more valuable tips and information, visit www.prudentcreditrepair.ca

Not Letting Your Money Control You

We are living in a difficult economic situation and we are all affected by it but we can all create a better situation for ourselves. There are a lot of people out there that let their salary dictate their spending habits and not their financial position.

Many people who don’t earn so much have a solid financial position and then there are those who have huge salaries and are on the road to bankruptcy. This is because they spend even more and allow money to control them. They are in a world of financial status and usually don’t feel good about themselves so they allow the money to control them rather than improving their financial situation.

If you are happy then you don’t need to impress others with a false display of wealth or status. We need to be happy within ourselves and not care about what others think. When we take control of our money, we become more secure, financially and emotionally.

We all from time to time need to splurge. You don’t want to stop yourself from getting things that you need or love because this is allowing money to control you. It’s about being frugal. Frugal means avoiding waste. It’s not about being cheap and stopping yourself from buying what you want until you absolutely have to and then you buy the cheapest item with no regard to quality. It’s better to buy a better quality item one time at $1000 than to buy a cheaper item at half the cost but need to replace it more often.

Take a minute to review your bank statements. Is it showing good spending habits? You need to know how much money is coming in and how much is going out. Set aside some time to work out a budget, you’ll be thankful in the long run.

You want to create a life of happiness and worth. Everyone deserves to have what they want. Everyone deserves to have what they are worth. You worth is decided by you and you only. Only you can guide yourself in creating the life you deserve and not be dictated by money.

Have you ever heard the saying “You need money to make money” and you think how can I make money if I don’t have any? Well the wealthy achieve success by having money work for them rather than working for money.

For more valuable information, visit http://www.prudentcreditrepair.ca/

Personal Finance Strategies for Newlyweds

You had your dream wedding and you have become a couple with dual incomes and mutual responsibilities. Financial strategy is not the most romantic top that you can discuss as a newlywed but it’s definitely a top priority. You both want to enjoy your lives together and plan for that comfortable retirement.

Unfortunately many newlyweds set themselves up for failure. Financial hardship is a leading cause of divorce so to increase the harmony in your lives by talking about financial choices. Plan to merge your financial lives and stop any bad money habits before you bring them in the marriage.

Figure out where you both stand financially. Review all your debt obligations together. Sit down and plan out a way that you together can pay off the debt. It would be ideal to eliminate all debt prior to getting married not to burden your spouse with your debt. If this is not possible then you both must work hard at making your marriage and your family life debt free.

Have a budget. You are now merging two spending and saving habits into one. If you had a budget while you were single, it’s time to draw up a new one as a couple. You should first write down your fixed expenses like mortgage/rent, car payments, insurance premiums etc. Then write down your flexible expenses such as groceries, phone bills and utility. If your budget permits, try to contribute to a savings account as if it was a fixed expense. Track your spending for a while and then work together to identify and fix any common bad spending habits.

Optimizing Insurance. Now that you’re a couple, you need to change your insurance coverage. You should examine the different insurance plans and premiums and decide where the combination should occur. Get an umbrella package which will enable you to save while having all insurance under one package.

Some of the most common sources of arguments in marriage is money, so failing to discuss your financial backgrounds could be disastrous. Communication is key to survival in any relationship. With your budget in place and your plan for your future, you’re both ready for a successful and financially responsible marriage. Your stress levels will be reduced and your foundation will be strong. All this planning will ensure that money does not come between you and your spouse.

Be responsible and enjoy your life as one. For more valuable information visit www.prudentcreditrepair.ca

How to Get Financial Assistance If You Are A Single Parent

Being a parent is difficult. Being a single parent where you’re the only provider can be extremely challenging financially. Knowing how and where to get the help you need as a parent can make a difference in the quality of your life.

There are so many financial challenges that a single parent faces such as: Employment, daycare and housing.

There is plenty of financial help available for single parents. You just need to know where to look. Single parents need to educate themselves about what is available to them and how they can utilize the assistance to start a fulfilling life for them and their children.

One big area where a single parent can benefit is when they file their tax return. If they were employed throughout the year and have earned under a certain level, they can receive back a hefty tax return.

Financial assistance is also possible through government initiatives. Ontario Works is a program that allows residents of Ontario who are in financial need to get assistance. In order to apply for assistance you must provide:

• A social insurance number
• Health card number
• Proof of identity
• Information about assets, income and living expenses
• Signature allowing the government to verify all above information

Not all single parents have the support of family and friends to help guide and keep them on the right track so if you’re looking for local assistance for help in other areas of need, single parents can also turn to local services and churches. These services will help with clothing, shelter and providing resources.

We need to be honest about how expensive raising children really is. With a bad economy and the struggle with paying for gas, car payments, room and board, child related expenses such as diapers, medical and food will affect your financial situation dramatically.

Knowing how to deal with all this ahead of time will protect you. Managing finances can be overwhelming for anyone and although Government assistance can greatly help your circumstances, careful planning and budgeting and support from local services will empower you and make your life that much easier.

For more valuable tips and information, please visit www.prudentcreditrepair.ca

Defaulting On a Loan – The Dumps

Default, in the finance industry, happens when a debtor has not met their obligation according to a debt contract. This will occur when the debtor is either unwilling to pay their loan or they are not able to pay their loan.

When you default on a loan, it means you’re neglecting your financial responsibility. We are all aware of the reasons why someone would not be able to pay their loan. People lose their jobs or a sudden medical emergency may happen but whatever the reason may be, you should always communicate with your lender. Most lenders will work with you especially if your financial hardship is temporary.

Most of us have occasional late payments but when it evolves from a late payment to a missed payment to no payments, the debtor will suffer the consequences. The first thing that happens when you default on a loan is the organization will begin to contact you to get their money. It will start with friendly reminder calls or correspondence but as the default continues, they become more aggressive and the contact is more frequent.

Eventually your account will be turned over to a collection agency. This kind of action will begin to affect your credit. When this happens, it will be harder for the debtor to get other loans, it will increase your interest rates and sometimes may even affect your ability to get a job. It can even result in a repossession or foreclosure depending on the type of loan.

If you simply don’t have the money to pay, it still is best to be proactive. When you approach the situation in this manner, the lenders will peg you as a delinquent with no intention to pay and take their actions accordingly. If you are genuine and want to make the effort, then contacting your lender to create an easier payment schedule is more likely to happen or even having the interest rates reduced.

If you have already ignored the situation, it is never too late. Your credit will most likely already be damaged but the negotiation process is never off the table and there may still be a chance for damage repair.

Putting yourself in this situation can and will only lead you into a world of madness. You will be consumed by the stress of your finances, frustrated by the constant aggressive contact and the feeling of depression will arise and will only deepen. Take care of you and your financial health!

For more valuable information, please visit www.prudentcreditrepair.ca

What Should Your Credit Score Be?

Most of us depend on credit for many things such as buying a car, house or getting a loan. Your credit report is your credit history wrapped up in three digits. It measures your ability to make payments on time and is designed to help lenders determine your credit worthiness.

Credit scores in Canada can range from 300-900. The higher your score, the healthier your financial record is and lenders will view you as less of a risk to them. The interest rates you receive will be determined by your score. Maintaining a good credit score is essential to your financial well being.

What is a good credit score?

You are considered to have good credit if you have a number of 700 and up on your credit scale. This score will allow you to have fewer problems applying for loans and getting better interest rates.

You are in the okay range if your credit score is between 450 and 650. You may be viewed as a risk but one that is acceptable to most organizations depending where you fall between these 2 numbers. The closer you are to 650, the better.

Anything under 450 is considered bad credit. You will be looked at as a high risk to the lenders. You will have significant trouble acquiring loans. Nowadays, there are plenty of places that will approve you for a loan but the downfall is that your interest rates will be sky high.

There are other factors that contribute to your credit score. The major factors contributing to your score is made up of the amounts that you owe and your payment history. The lesser factors are the type of credit you are using, the percentage that is new debt and the length of your credit history. These are all factors that are considered when determining your credit score.

You have a right to see your credit report. No one can have access to your report unless you allow it. Remember that every time you apply for a loan or credit card, you are allowing the company to check your credit report.

Knowing your actual credit score is a great start. You should understand the key factors that affect your score and learning how to increase and/or maintain your score over time is also important.

For more valuable tips and information please visit www.prudentcreditrepair.ca

Smart Things to Spend Your Tax Return On

With many people anxiously awaiting their refund from the Canada Revenue Agency, now is a great time to think about how you can spend that tax return. The biggest mistake one can make is to look at the refund as free money. A tax refund is NOT free money, it’s YOUR money! When you view your refund as something other than a paycheque, you’re more likely to spend it on treating yourself. Of course, there’s nothing wrong with treating yourself but here are just a few smart ways of spending your tax refund.

Credit Card Debt – If you’re getting collector calls then you know that ignoring them won’t make them go away. Use your refund to take care of those late payments. If you’re current on your bills, why not bring down or pay off your credit card debt balance. This way you have the chance to increase your credit score and be free of interest accumulating.

Mortgage – If you have a mortgage loan every extra payment you make reduces the length of your loan and the amount you pay in interest. Every extra payment will allow you to pay more in principal and less in interest in the long run.

Auto – If you have a car loan, this is a great opportunity to make an extra payment. If you are planning on selling your car, then use your refund or part of your refund to get your car detailed. Getting your car detailed can make a huge difference when you’re putting your car up for sale. You can also use the money to service your car properly. Many just put off servicing their car so this is a good time to get that oil change you’ve been putting off, check your tires and get that long awaiting tune-up. A well maintained vehicle with properly inflated tires burns less gas and saves you money in the long run.

You – Hopefully your tax refund is enough to cover one of the above and give yourself a little treatment but remember there’s always a balance. They key is to take care of your responsibilities first and then enjoy your money. If you and your family have been stressed because of daily life chores and haven’t had the time or money to enjoy a nice family meal at a restaurant then now is a good time for that. Buy tickets to a show or enjoy a day at the spa with your child. Buy yourself that one good suit you’ve always needed.

There are so many things you can do with your tax refund, you just gotta take care of your obligations first. For more valuable information and tips, please visit www.prudentcreditrepair.ca