Monday, 24 February 2014

Rebuilding Credit Doesn’t Have to be Like Climbing Mount Everest

Debt, for many Canadians, is an everyday issue. But it isn’t only debt that can be problematic - even when you get rid of your debt! If debt has caused your credit score to plummet it might be time to think about getting it back in shape. There are a number of ways that you can work on rebuilding credit, but we thought we’d provide you with some of the best ways to do so.
Here are some good strategies for rebuilding credit:
o   Keep balances low on all credit products. When you pay off a credit card, or pay it down significantly, keep it that way. However, if you can’t pay off a big chunk at least try to keep the balance low. The typical rule of thumb is no more than 65% of your total available credit. This shows that, although you have access to the credit, you are not relying on it, demonstrating that you are not necessarily living outside of your means. 
o   Avoid applying for too much credit. When you apply for any type of credit product, this gets reported to your credit report, and when you continually apply for credit this negatively impacts your overall credit. This is because it looks as though you are a credit seeker – someone who can’t afford to live without credit, but also has a hard time qualifying for it. Try to limit the number of applications you submit, including those done by current creditors (ie. credit limit increases).
o   More than minimum payments. Minimum payments are mostly interest, so in an attempt to rebuild credit try to make more than the minimums, even if it is only a little more than what is required. This has the added benefit of helping you pay off the total balance faster. 
o   Keep an eye on your credit report – but don’t go overboard. It is always smart to know what is going on with your credit report, so checking it periodically is a good idea. With that said, checking it every other week is largely unnecessary, and even though your own inquiries are reported to your credit report as ‘soft’ inquiries, they are still reported, and any activity can have an impact on your score. Resist the temptation to check on too regular a basis – perhaps limit it to quarter-annually. 
o   Get a secured credit card. With a secured card you, as the cardholder, make a deposit onto the card and this becomes your limit. At the same time, you are required to make regular payments to the card (to pay off your ‘balance’), but if you default the money comes from that initial deposit. Keeping up the regular payments helps to rebuild credit as it shows positive credit activity.
Rebuilding credit can take time, but it doesn’t have to be difficult. Don’t just assume that because your debt load has decreased, your score has increased significantly. Use these strategies to bring that score back up.
For more about methods for rebuilding credit please contact DebtCare Canada today at 1 (888) 890-0888 or visit us online at  

Tuesday, 18 February 2014

Debt Relief 101: Refinance Your Mortgage to Consolidate Debt

When your debt begins to climb at a rate that seems to be spiraling out of control, or if you are just tired of shelling out money without seeing totals decrease, it might be time to consider a different approach. Making minimum monthly payments is not actually going to get you out of debt – and realizing this, many Canadians have chosen to refinance their mortgages as a way to consolidate debt – but is this the right option for you?
There are several reasons why refinancing your mortgage to consolidate debt can be a smart option. Firstly, because you are consolidating you are getting rid of that laundry list of monthly payments and consolidating them into one, tidy payment. This can make keeping track of payments far easier – and less stressful. Secondly, you can save huge on interest. If you are carrying a number of different credit products, all with varying interest rates, all applied at different periods, you are paying out far more than if you have one larger total at a single interest rate. 
With these major positives, there have to be some negatives, right? Well, as appealing an option as mortgage refinancing may be, its benefits are only open to those who qualify. What do we mean? Well, since mortgage refinancing requires upping the lending limit on your current mortgage, you have to actually have a mortgage to qualify (so renters are out). You can’t get a mortgage to consolidate debt, so unless you own your home, this option is not available.
Another issue that many have when attempting to refinance is the fact that your credit needs to be great – but if you are maxed out or have missed payments, the lending institution isn’t necessarily going to have much faith in your ability to repay your debt. Yet another deals with the fact that stricter CMHC lending guidelines have decreased the total refinancing limit to 80% of a home’s value, so if your debt will put you over this threshold, a total consolidation is not feasible.
So, is mortgage refinancing to consolidate debt the best option for you? Despite the downsides associated with qualifying, if you can secure funding it may very well be the most intelligent option. It is also better for your overall credit versus a consumer proposal or bankruptcy – so that is also very attractive.
When you are considering the various options available to get out of debt, mortgage refinancing is one that should be on your list – just be prepared if your credit isn’t stellar or if there is no equity in your home.
For more about mortgage refinancing to consolidate debt please contact DebtCare by calling 1 (888) 890-0888.

Monday, 10 February 2014

Get Out of Debt: Five Easy Steps to Get You Started

We’ve all heard that myth that dreaming about your teeth falling out means you’re worried about money – but what if Mr. Sandman leaves you checking your teeth every single morning? If money is all you can think about, it might be time to make some changes. Want to get out of debt but just not sure where to start? We can help. Here are 5 tips to help get you started!
1.      Create a budget and track spending. If you don’t know what you owe, or where your money is going, you can’t realistically make a plan to get out of debt. Inventory your debt totals, create a realistic budget and track your monthly spending in order to motivate and eliminate.

2.      Pay more than the minimums. When your credit card bill comes and your minimum payment required is $50, that doesn’t mean that $50 will be taken from your total owing. The majority of this total goes right to interest, so stop paying only the minimum on your credit cards and pump up those payments as much as you can! 

3.      Stop spending. Sure, this may seem like common sense, but unless you actually do it you are not fixing anything. Look back at that tracker and identify areas that could benefit from a slash. Or, if you can’t seem to resist temptation, get rid of that credit card, take it out of your wallet, or find another effective way to stop using it!

4.      Get debt help. Worried that you can’t tackle your debt on your own? You don’t have to. Dealing with debt can be tough, so why not research and get in touch with a reputable, professional debt management firm. There you can get advice on debt relief or find out more about solutions to actually get rid of the money owed. 

5.      Stay focused. Don’t just say you are going to get out of debt – do it. Stay focused on the end goal, not on how tough it is to get there –most good things don’t come easy! Use your monthly tracker (and those decreasing numbers) as motivation!
Get your debt under control and eliminate your financial stress with these tips. Take it one step at a time and that mountain will soon become a molehill!

For more debt reduction tips please contact DebtCare Canada by calling 1 (888) 890-0888 or visit us online at   

Tuesday, 4 February 2014

Helping Out – Finding the Right Debt Management Firm

No matter how you look at it, debt is never something that anyone wants to deal with – both having it and getting rid of it – but it is a reality for the majority of the population. That being said, some individuals are able to conquer their debt problems on their own, eliminating the stress that comes with it. However, for others, when debt becomes insurmountable, turning to a debt management firm is the smartest solution. But how do you know which firm you can trust?
We have all heard the ads on the radio and seen the commercials about companies offering various debt reduction or debt elimination strategies – but not all of these are of the same ilk. Here is a list of characteristics to look for when researching the right debt management firm.
Experience – When it comes to your money, it is never a good idea to just go with the first company you find. Make sure that the firm you choose to work with has the experience and reputation to back you up. Is it a new business, one taking advantage of higher than average Canadian consumer debt levels, or is it one that has years of professional experience under their belt? The choice should be obvious here.
Options – Make sure that the company you choose to go with can offer you a number of different options for debt relief. A company that deals solely in bankruptcy is never the right choice. Make sure that your options are explained to you in a way that you understand, and that in the end the choice is left up to you. Ask questions and get the pros and cons (there are always both).
Consultation – The right company should offer some form of consultation, and the best companies will offer this for free. If you call a company and a solution is set up for you without any consultation at all, chances are that company does not have your best interests at heart. Thoroughly working through your unique situation is the only way to reach a realistic and achievable solution, so make sure that this is offered.
Code of Ethics – If the company you choose doesn’t have a code of ethics, you may not be as protected as you should be. Having a set standard to follow means that your information is protected, that you are getting fair and unbiased treatment, and that you are being given the tools to create an enduring plan for financial stability no matter the route you choose to take.
Stop stressing about your debt and solve the problem. The right debt management firm can help you – just make sure that it is a reputable one with the experience to get the job done right!
To find out about the debt management solutions available to you, from a firm that you can trust, please contact DebtCare Canada today by calling 1 (888) 890-0888.