Being a mortgage professional, one of my favorite things is to educate my clients and readers. It gives me great pleasure to see that ahhaaa moment when they finally grasp a strategy or idea. Understanding what you are doing and having knowledge of how to protect and prepare yourself are key. That is why I decided to advise on how to get yourself through the recession and prepare for anything in the future.
1. Get to know your credit history. Knowing exactly what your score is will give you an advantage when dealing with lenders. You will be able to apply for best rates and negotiate cheaper credit. That is the whole point to use someone else’s money as cheap as possible. Why pay more. By law Canada’s three reporting agencies must provide you with a Consumer Disclosure report free of charge if ordered by mail or fax.
2. If you experience set backs or difficulties, DON’T HIDE THEM!!!! Look at your credit statements and meet with a professional. Try calling your credit card companies to see if you can figure out lower payments. Consolidate your debt. ALWAYS PAY SOMETHING. You need to keep your good credit rating.
3. Pay your bills on time. Missing even one day can lead to a negative posting on your credit report. Never go over your credit limit. In fact try to keep your credit use up to a max of your credit limit. So if your limit is $1000 do not go over $400.
4. Do not stock up on high interest credit cards. Yes that suede leather Armani jacket at The Bay looks great, but getting a credit card from the store to pay for it, will cost you more in the end. If you open too many credit cards you do not use, it will affect your credit score. You will look like a credit seeker.
5. Never apply for too much credit in too short a period of time. You want to aim for 2-3 credit inquiries a year. Anything more will affect your score. Also, multiple credit report hits within a 2-3 day period do not count as someone may be shopping for a car or mortgage.
6. Always check your statements for accuracy. Report any odd transactions.
7. Never sign a contract you do not understand. Especially, if you are being pressured by the sales person. Always ask them to review it. You have time to take it home and think about it. Most contracts can be cancelled within the first day or two of signing without penalty.
8. Always pay off highest interest first. So if you have a credit card for 21% and a line of credit for 9%. Pay the credit card off first. Even use the line of credit to pay off the whole card balance in full. Try to put away 10% of your pay checks into a savings account with a relatively high yield.
9. Go online. Google and yahoo will have hundreds of thousands of sites to help you understand how credit works and how to get out of debt. Bewere of services that offer to help you fix your credit for high retainer fees. Most local government agencies can refer you to a local not for profit organization that can help.
10. CASH is King!!!!! No matter how big your company is our how much you are worth on paper. If you can’t pay your bills and you can’t sell your assets then your stuck. Always save some cash for rainy days, and if you have not. Start, an investment property is a great way to get a safe return with positive cash flow.
To find out more email me at wpianka@mortgagealliance.com
Greater Toronto Area Mortgages and Real Estate 