Have you ever wondered if only rich people have fabulous credit scores?
Wonder no longer. The truth is you don’t have to be rich to have an awesome credit score in Canada. You just have to learn to live within your means.
The ironic thing is that people who don’t have good credit are the ones who wish they had good credit scores while those who have awesome credit scores usually don’t care because they don’t want to borrow any money. Part of the reason for this is that people with the very best credit have usually learned to work with what they have. If they don’t have the money they need to buy something they want, then they don’t use credit to buy it. They save, and then they buy—but only when they have the money. If they do use credit, they will only use a small amount of credit that they know they can quickly repay.
Steps you can take to create an amazing credit score
If you have a poor credit score, you can eventually turn your bad score into a great one by following the tips listed below. We know it is easier said then done, but here goes . . .
- Pay all of your debts on time each month and never be late.
- Have two or three credit cards report on your credit bureau. A line of credit will also help but is not necessary.
- Have reasonable credit limits available to you on your credit cards and line of credit, but don’t use them (or hardly use them).
- Don’t apply for credit too often.
- Do all of the above over many years and your credit score will be amazing (the only catch is if you have late payments or other negative information reporting on your credit bureau right now, this bad information will need to fall off your credit bureau before your credit rating can soar. It can take 6 to 7 years from the date bad credit occurred for the negative information to fall off your credit bureau).
- Learn to live within your means without using credit. If someone took away all of your credit cards and your line of credit tomorrow, how would that effect you? Would your life continue on just fine or would that really mess you up? You will never have an awesome credit score as long as you depend on credit. You have to break your dependency and learn to live on a budget. Once you learn to live on cash, and start making progress paying down your debts, your credit score will continually improve.
- Make living on a cash budget a life style choice. As the years pass and you pay on time and don’t charge much on your credit cards, you will feel better knowing that your finances are under control.
How to Manage Your Money
March 21 2017 Posted by
1. Know what you're doing. Making financial choices at haphazard is never a good idea. Everyone needs a plan in place for the future. Determine, for example, what you're going to do with the money you save up. Are you going to buy a new home? Invest in the stock market? Start a retirement fund? While each of these might be viable options, you need to know which one you're actually aiming at.
2. Track spending. So many people have no clear idea of how much money they are spending each month. This leads to overspending, and can cause trouble if an individual buys more than they can afford. The simple solution is to record your purchases as you make them, keeping a running total of your outlay for that month as you go.
3. Limit spending. Now, use the data you've gathered to cut down on your expenses. Controlling spending is hard -- most people have a hard time stopping themselves from buying unnecessary, or too costly products. That's why combing through your purchases at the end of each month is such a good idea. You'll be able to separate the things you really need from the stuff you only want, and so modify your buying behavior going forward.
4. Be organized. Having your financial affairs in good working order is key. One good idea is to keep all important financial documents -- bills, tax returns, etc. -- in one single place in your home. That way, you'll know where to look when you need a particular item. It's especially important to keep close track of documents you might need later (such as insurance policies or documents related to taxes).
5. Save. It's a simple financial reality: we all need to save for the future. Aside from the importance of putting money aside for retirement or other long-term necessities (such as a college fund, if you're a parent), it's also important to set aside money for a rainy day. You never know when financial trouble -- in the form of an economic downturn, a lost job, or something else -- will hit. So prepare for whatever the future holds by putting something aside each month.
Many folks do a terrible job of money management -- don't let yourself be one of these people. A little care and attention to the basics of money management are all you need to set yourself on the right path. Learning the five rules described here is a great start.