Understanding finances is difficult.
You may have bad credit or are struggling to rebuild your credit. You are probably thinking that rebuilding your credit is a hard, stressful, and difficult process. You are not alone. We have all had financial downfalls. Just because you have borrowed money and are struggling to pay it back does not mean you are a bad person. Even some of the richest people in the world have dealt with financial difficulties. Do not allow yourself to be embarrassed by your credit score.
This guide will give you some effective tips that are proven to rebuild and boost your credit.
In case you didn’t know, your credit is as essential as your health. To buy or rent a house you credit matters. To buy or rent a car your credit matters. Any kind of loan you are applying requires your credit score. You even need a good credit score to get a cell phone. With bad credit or very low credit, it is hard to get what you want or what you need to survive, especially in Canada and the US.
Many of us grow up not paying attention to our credit or not even knowing what it is. When we were in our late teens and twenties and we got our first job and credit card, we may have gone a little crazy with our paycheck. Maybe we did not have anybody to talk to us about budgeting and spending, and how it will impact us later on in life. So maybe we maxed out our credit card or paid our bills too late. Now we are trying to figure out how to get back on track to an average score. The most common thing that is affecting your credit is late or non-payment.
Many options can help you to get back to an average score or even better. Yes, rebuilding your credit does take some time to get back on track. I have been doing some digging and I have tried some things that have helped me. Here are the best tips that will help you on your credit journey.
Suggestions and strategies:
1. Hire a credit coach
This is by far the most effective way to improve your credit score. A credit coach will personally talk to your creditors on your behalf. They will ask the companies that you are owing money, to remove things on your credit record. Your credit coach will request a clean up of your file. This clean-up may include removing things on your record that has been there for a long time. If your creditors do not cooperate, you have the legal rights to file a complaint.
2. Stop applying for things that you do not need
Every time you apply for something like a credit card or a cell phone, your credit score is checked. Every time your credit is checked, your score is reduced. Unless it is necessary, you should avoid applying for new accounts. These inquiries can remain on your record for at least 7 years. This is one of the easiest and fastest ways to reduce your credit, so avoid doing this
3. Pay your current and exciting bills on time.
If you can afford to pay your bills on time, please do so. Your creditors will see that you are trying and will credit you for your effort. They are not asking you to give them the full balance, but making an effort can be an advantage for you. They will report it to your credit bureau, and that will move you a few numbers up.
4. Arrange payments.
For your outstanding bills, try your best to keep your promise when you arrange payments. This will keep them from lowering your score and sending a negative report to the credit bureau. You do not want to add any more negative reports to those that are already pending. This will keep collection agencies from harassing you.
One very important thing to know about the credit bureau…
Your credit bureau is a record built on your current and past bills. If you do not pay your bills on time, then this will place a strike that can go against your credit. Your creditors will send your file to the credit bureau. That is what anyone looks at when checking your credit. The more strikes or negative reports that are on there, the lower your score drops. The lower your score drops, the lower your chances are in getting any loans or opening any new accounts.
The Statute of Limitations
Now please read this carefully. The statute of limitations is a law passed by a legislative body in a common law system to set the maximum time after an event within which may be initiated. When the time specified in a statute of limitations passes, a claim might no longer be filed. If it is filed, it may be liable to be struck out. All claims are time-sensitive and cannot be filed after the statutory limitations period.
In Ontario, Canada the statute of limitations is (7) years. After that, even if your bills are paid or not, it’s illegal to have it sitting on your credit. You can ask the bureau to remove it. If they refuse, you are within your rights to take legal actions against them. Some of these collection agencies are not even licensed to perform collection. Many do not understand the law. You should ask them to tell you where they operate from and where they are calling from.
The statute of limitations in canada.
Here is a list of statutory limitations based on province. The statute of limitations may change over time so be sure to check with your credit agency:
- British Columbia: 2 years
- Alberta: 2 years, can be extended to 10 years if there’s a judgment
- Saskatchewan: 2 years
- Manitoba: 6 years
- New Brunswick: 6 years
- Newfoundland and Labrador: 2 years
- Nunavut: 6 years
- Nova Scotia: 6 years, can be extended to 10 years if there’s a judgment
- North Western Territories: 6 years
- Ontario: 2 years
- Quebec: 3 years
- Prince Edward Island: 6 years
In Canada, debt cannot be pursued after 6 years. Based on which province you live in, the statute of limitations will vary, typically ranging anywhere from 2 to 10 years.