Having good credit is your means to achieve your financial and life goals. However, if you are not careful in paying your debt then bad credit can make things difficult for you. Remember no credit problem is too big or small. All you have to do is try to fix it! With the right credit solution, all debt issues can be fixed if you get to find the right ways. This blog talks about what can cause a credit issue, how it can affect you and how you can solve it.
What causes credit issues?
A number of reasons can cause credit issues, sometimes it is just one and sometimes a number of factors play a part. Below are listed some of the common reasons that can cause a credit issue.
• When you are irresponsible with your credit card and other credit. In this case, it maybe not making your credit payments in full and on time.
• Your debt surpasses your affordability.
• Lack of awareness in terms of what determines your credit scores. You do not know things like how to calculate your credit score.
• You lack knowledge about personal finance.
• Loss of a job or medical issues may cause financial problems or some unexpected situation.
Can credit issues affect your life?
Absolutely it can and it does! Below are listed some of the ways in which credit issues can affect your life.
• When you fail to pay your debts on time and it results in accumulated interests on the outstanding debt.
• When the current interest rates increase.
• When you have credit score issues or face difficulty in getting new financing.
• When all income goes towards debt payments, you face a tough situation.
• As you live paycheque to paycheque, you run out of cash constantly.
• When you cannot fulfill your life and financial goals like buying a house or car, taking up higher education, retirement goals, saving money and so on.
• You constantly have to face collection agencies and creditors.
8 Credit Solution Tips for Canadians
Before even figuring out the solution, you first have to address what is causing the credit issue in your life. You cannot find a solution to a problem you do not know of. The moment you diagnose the problem, the following 8 credit solutions tips are going to solve all your problems.
• Professional Credit Counselling: Talk to a credit professional who can understand your issues and give appropriate solutions. The professional, of course, cannot get you out of the situation but only provide counselling and offer advice.
• Plan your budget: Plan your budget according to how much you earn and how much you spend. This solution will work when your credit history is not very severe and controlling your expenses can help get you manage your budget.
• Get your credit report: Take out a full report of your credit and your score. Study it thoroughly. To understand how big the issue is, you need to know the credit history and status in-depth. It will give you an idea of what type and amount of credit you are dealing with.
• Get a secured credit card: Get yourself a credit card that is secured by cash or another asset. If you have faced financial struggles and have set out to rebuild your credit then secured credit cards are exactly what you need.
The above 4 tips were for credit issues that are mildly normal. If you are under excessive debt and are facing serious credit issues then the following 4 tips are for you.
• Debt consolidation: Under debt consolidation, you can take a huge sum as a loan and pay off all your debts.
• Consumer Proposal: It is a legal process. Under consumer proposal, an arrangement is made and negotiated between you and the creditors.
• Debt Settlement: Under debt settlement, a negotiation is made between you and the creditors to make a small payment that you owe them. Instead of not paying anything, that small amount is considered and agreed upon as full payment by both parties.
• Bankruptcy: Bankruptcy is a legal process where you are relieved of the debt because the individual can no longer manage their debt.
There is no instant solution that wipes away your credit issues. You need to put in the time, effort, patience, commitment, sacrifice in eliminating your debt problems. For more such helpful tips and information on loans and credit, visit LendforAll. Also for any kind of loan and credit assistance, contact LendforAll today!