Credit Solutions For Canadians

Credit Solutions For Canadians

Credit is helpful for many things as it can help you achieve your life and financial goals. However, taking out debt can be a slippery slope if you’re not careful. At Loans Canada, we believe that no credit problem is too big or too small to consider and fix. Furthermore, all debt problems can be fixed with the appropriate credit solution, it is merely a matter of finding the right options. In this article, we will explore the causes and stressors of credit issues as well as solutions to reverse the credit problems you’re experiencing. 

Is being in the 800 credit score club really that important? Find out here.

What Can Cause Credit Issues?

Credit issues can arise from a number of actions. Sometimes credit issues are a result of one action and sometimes they are a result of many moving parts. Below are some situations and habits that can result is credit issues. Keep in mind that these are not the sole causes of credit issues, but they are the most common and prevalent. 

  • Irresponsibility with credit cards or other credit, for example, not making payments on time and in full
  • Taking out more debt than you can afford
  • Lack of knowledge about credit scores, what impacts credit scores and how credit scores are calculated
  • Lack of knowledge about personal finance in general
  • Unexpected problems that result in financial issues, such as the loss of a job or medical problems
Canadian Credit Score
For an in-depth look at how your credit score is calculated, click here. 

How Credit Issues Can Affect Your Life

Now that we know the potential causes of credit issues, the question becomes: how do they impact your life? Financial struggles are extremely stressful because of the many accompanying stressors. Below is a list of ways credit issues may impact your life. 

  • Accumulated interest on outstanding debt
  • Increase in existing interest rates
  • Difficulty obtaining new financing and credit score issues
  • Getting caught in a cycle of debt because all income is going toward debt payments
  • Constantly running out of cash and living paycheque to paycheque 
  • Inability to achieve financial and life goals, such as buying a house, moving to a new city, going to school, retirement, or saving money
  • Having to deal with creditors and collection agency calls, letters and other forms of communication frequently
How Does Bad Credit Affect Daily Life?
Take a look at this infographic all about how bad credit can affect your daily life.

Credit Solutions Available to Canadians

Before choosing the right credit solution for your needs, you need to determine what the source of your credit issues is. After all, you can’t find an appropriate solution if you don’t know what the problem is exactly. Once you place your finger on what the issue is, consider the below list of credit solutions to figure out how to solve your credit problem best.

  • Credit Counselling. Talking with a professional to figure out potential credit solutions and gain advice. Note that the professional will counsel and advise you on how to handle credit issues, they won’t actually help you get out of the situation. 
  • Budgeting. Budgeting involves setting monetary amounts toward how much you spend based on how much you earn. There are many apps available to help you budget if you don’t want to go old school with a pen and paper. Budgeting is ideal if your credit issues aren’t severe and you merely need to control your spending. 
  • Credit Score Checkup. If you don’t understand the gravity of the situation, pulling your credit report can help you understand what type and amount of credit you’re dealing with. 
  • Secured Credit Card. A secured credit card is exactly what it sounds like, a credit card secured by cash or another asset. Secured credit cards can help you build credit if you’re starting out or rebuild credit after financial struggles. 

For more serious credit issues caused by excessive debt, consider the below list of debt relief solutions.

  • Debt Consolidation. Debt consolidation involves taking out one big loan to pay off all your debts. 
  • Debt Settlement. Debt settlement is the process of negotiating with creditors to make a smaller payment than what is owed, as opposed to none, that will be considered full payment. 
  • Consumer Proposal. A consumer proposal is a legal process whereby an arrangement is negotiated with creditors. 
  • Bankruptcy. Also a legal process, a bankruptcy relieves you of your debts because the individual can no longer manage their debt. 

At this point, it is important to note that there is no miracle credit solution that will wipe away your problems. The reality is that these credit solutions involve work, sacrifice, and commitment to successfully eliminate debt. Anyone who promises you that their debt solution will wipe your credit issues with the snap of their fingers is likely lying or part of a scam. Unfortunately, it is easy to get into debt, but hard to get out. 

Do you know what your credit utilization ratio is? Learn more here

Big or Small, We Can Help Fix Them All!

Life happens which often results in issues with credit. Whether your credit problems are big or small, Loans Canada can help you find the correct solution. If you’re tired of carrying the weight of debt problems, reach out today to find out how Loans Canada can help!


Rating of 5/5 based on 1 vote.

How useful was this post?

Click on a star to rate it!

Posted by in Credit
Veronica is a freelance writer who specializes in creating unique and educational personal finance content. She has extensive experience writing blog posts for companies in the financial sector. Veronica's background is in accounting as she graduated from Western University in 2017 with a degree in accounting. She is passionate about using her accounting expertise to help others with their personal finance questions and issues and enjoys using her writing to educate Canadian readers. When Veroni...

Note:

All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster.

Loans Canada and its partners will never ask you for an upfront deposit, upfront fees or upfront insurance payments on a loan. To protect yourself, read more on this topic by visiting our page on loan scams.