There are many ways to get ahead financially:
- attend seminars where you cut up your credit cards with hundreds of other people,
- participate in debt consolidation services that help you take out a home equity loan or refinance your home,
- or you can transfer debt on one credit card to another credit card with an introductory rate of 0% (which goes up to 12% six months down the road).
The reason these methods don’t work is because we don’t concurrently cut our expenses while implementing these strategies.
Even if we are making more money, unless we cut expenses, we will continue to spend more money than we have and incur debt.
Manage yourself and your money. Money is like food; we don’t eat only when we are hungry, and we certainly don’t spend only when we need something.
When there is a will, there is another way:
Your credit score (also called your FICO or Beacon score) will affect the interest rate you are able to secure. Credit scores range from 500 to 900. Where are you on the scale?
What is in a number?
500 and below your in serious trouble
650 to 680 you probably will have a difficult time getting credit, and if you do it will be at higher rates
700+–excellent score
How you got your credit score:
a) Payment history (35% of score). Make payments on time or early.
b) Amounts you owe (30% of score)
c) Credit history (15% of score). The longer you have credit, the higher your score can be.
d) New credit (10% of score). New credit cards.
e) Type of credit you have in use. Mortgages, Credit cards, Loans, etc.
There are two reporting services that can give you your score: Equifax.ca and Transunion.ca. At least once, do an experiment and order a report from two. They will provide a complimentary report each year, per person. You will most likely find inconsistencies in the reports such as missing and incorrect information. Each time a credit report(hard enquiry) is run on you, your score is lowered by two or three points.
You still want to shop around for a mortgage, but consider using a mortgage broker who runs one report to shop around for the loan. If you go to five different banks, that can drop your score 15 points or more easy.
