Getting Your Credit Back On Track



As cliché as it may sound, “bad things happen to good people”. For many of us, we need the opportunity for a fresh start.

Getting in shape and improving our financial situation are likely two of the most common New Year’s resolutions but remember you don’t have to wait until January 1st to start. There is a great proverb that asks “Do you know when the best time to plant a tree is? The answer 25 years ago, the next best time is today!”

While I can’t help you get into better physical shape at Crown Credit Solutions we can help you with your financial situation.

There are ways / tips that we highly recommend that will help get your finances back on track this year.


1. Making Your Payments – On Time and As Agreed

We have mentioned in our previous blogs that re-payment history is a substantial factor when calculating and determining your personal credit score. Any missed or delayed payments can have a negative effect on your score.

Creditors and lenders expect that their customers will meet their re-payments obligations as agreed and can reliably pay back their loans or credit cards as arranged.

However, “bad things do happen to good people” and even the most responsible borrowers may experience a situation that will impair their ability to maintain their payment arrangements.

All is not lost. Most lenders will take into account an uncontrollable situation as opposed to habitually missed or delayed payments.

Further, with respect to credit card debt, if you are only able to make minimum monthly payments, you should make every attempt to pay and to pay them on time, each and every time. This will help you improve your credit score.

If you have experienced a set-back and you’ve missed some payments it will have a negative impact on your credit rating.  Making 6 consecutive months of on-time payments will help to improve your credit score and give your credit rating the boost it needs and can get you back on track in 2016.


2. Lower Your Credit Utilization

It is important that you manage your credit cards as efficiently as possible.  While maintaining your credit card payments is impactful and will help to ensure you have a positive credit score it is as important to also keep your credit card balances as low as possible.

As a best practice or rule, you should aim to keep your credit card balances at or below 35% of your maximum credit limit.

If you are carrying a balance on your credit card(s) that is higher than this 35% threshold, you will want to make this a second priority and a goal to work towards. Understand that this will take time, it will be well worth it and is a powerful way to stabilize your credit and set yourself on a more successful financial path in 2016.


3. Pay Down the Bad Debts First

Last and certainly not least, if one or more of your obligations has become a bad debt, write off, collection or judgment it is important to develop an action plan to resolve these more serious matters.

While each and every situation is unique, it is important to determine contact to the lenders directly and work co-operatively to a resolution that will be mutually beneficial.

As these accounts are resolved your credit score will improve.

At Crown Credit Solutions, we understand that bad things can happen to good people and dealing with credit issues can be daunting. We offer a free, no risk, no obligation credit evaluation to all of customers. Our goal is to help you understand your situation and the options available to you so that you are best able to make a sound financial decision (which may include the purchase of a vehicle and how to best protect your credit moving forward).