The start of a new year is the best time to take stock of your credit and debt status. Why should you do it? To know how much debt you owe and know if your financial condition allows you to borrow money.
So how do you review your credit situation?
Take a look at all your Financial Documents
From your bank statements to credit cards bills, pull up all of last year’s financial documents and go through them.
Once you have done that, get your hands on your credit report. You can get your credit report from the two Credit Bureaus in Canada – Equifax and TransUnion. You will get them for free if you ask the credit bureau to send it by mail.
The credit report is a detailed document containing your credit history and every other financial detail.
What to look for in your Financial Documents
- Review all the transactions you’ve had. Ensure that there is a consistency between the bills and the credit report. If you find a transaction that you can’t remember or an unlisted transaction, contact your lender agency immediately. You could be a victim of fraud.
- Find out if you have been making your monthly payments.
- Which debts have you defaulted on?
- How much debt do you owe?
- Who do you owe?
- The interest rates charged by various debts.
This will give you an overall picture of where you credit situation stands. Take a look at your credit score. Credit score is basically a rating on your credit situation. If it is below 500, then you need to improve it.
Improve your Credit Situation
You need to improve your credit situation by reducing the debts you are under. Here’s how you can do that.
Never Miss a Debt Payment
The best way to build your credit situation and reduce debt is to always make your monthly debt payment. Every payment you make reduces the debt burdening you and at the same time, reduces the effect of interest rate on that debt.
Talk to the Lender
Sit down with the lender and go over the details of your financial situation. Attempt to convince them and re-negotiate the debt. You can ask them to reduce the monthly debt payment, increase the debt time period or lower the interest rate.
Buy a Car
If you’ve been considering buying a car, then taking a car loan will actually work in your favor. It gives you a fresh opportunity to build good credit history. However, because of a low credit score, most lender agencies will not approve your car loan application. Insta Auto Loan does not discriminate when giving car loans, so best to apply with them.
Reviewing your credit situation is just a good way to know where you stand and ensure that you haven’t forgotten to pay any debts. Ultimately, this is a good way to stay financially healthy.
