Want to really ruin your credit in 2015? Just follow these easy steps! (or, do the opposite and make your credit amazing in 2015!)
Forgetting to pay at LEAST the minimum payment. Hanging out in the mountains with no cell service- no biggie…right? Wrong. Credit companies aren’t completely heartless, but a single 90-day-late payment is just as bad as a bankruptcy filing, a tax lien, a collection, a judgment, or a repossession when it comes to your credit report. Best advice we’ve ever received- pay your bills on time! If you aren’t going to be able to pay the entire balance on time, at LEAST pay the minimum.
Spending up to your credit limit. What’s the point of having a limit if you can’t spend it, right? Well, that’s what the credit card companies want you to think. Avoid coming anywhere near maxing it out if you want to be able to pay it off because that one time you can’t, you are going to get hit with interest payments that will make your debt grow to an even more unmanageable level.
Indulging. Do you REALLY need to buy that new designer handbag that you saw someone wearing on 17th Ave? Be reasonable with your purchases. That handbag is not going to ease your worries when you’re up at night because your credit card balance is so high.
Applying for several credit cards/loans. Having multiple credit cards and loans that you’ve applied for in a short period of time indicates instability and can make your credit score drop. Try to plan out your loan and credit card applications in an appropriate time frame, or minimize your other debts before you apply for new ones.
Getting rid of your old credit card(s). If you are trying to remedy your debt situation by getting rid of your old credit card(s) STOP. 15% of your credit score is based on the age of your credit, so by eliminating this card you are actually hurting your score. Try getting rid of newer cards first!
Unemployment. Credit bureaus do not know that you are unemployed, but a sudden reduction in your income may affect your ability to pay what is due, and that will affect your credit.
Closing cards with remaining balances. When a credit card company grants you credit, they are saying that you are deserving and able to have this card. This looks great on your credit score, and means that you are a good candidate for credit. When you close a credit card with a significant balance this is essentially saying you are no longer able or willing to make your payments, which will flag you as a poor candidate for future credit. Some advice: pay off the remaining balance, and keep the card- just don’t use it.
If by reading his you realize that you could use a hand with your finances, Hardie and Kelly can help. As Calgary bankruptcy trustees, we have helped thousands of people find the relief they need by consolidating their debt with a Consumer Proposal. Give us a call and we’ll help you get a fresh start.
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