The difference between Credit and Debt.

I've got too much DEBT!!!

 

Too many people have problems with debt and that's a fact. How do I know this? Well, I look at a minimum of 10 credit bureaus each day and get to see first hand the debt Canadians carry, not to mention the weekly stats posted regarding Canadian consumer debt.

Some of you may wonder how people have such problems with debt, when you can't even get approved for a $500 credit card. A regular question to me is;

How do people get so much credit?

Being granted credit depends on so many factors and is usually easier at a young age. If you've waited too long to establish your credit, that means it's going to be more difficult. Honestly, if you're 25 or older and trying to establish credit... it's going to be hard. 

There are many ways to establish credit, the most obvious would be to go to your bank (this means the bank that has your bank account) and apply for a credit card. I know for a fact that BMO will grant a $2000 credit limit to a young 18 or 19 year old looking to get started.... if you bank with them.

Why do I need credit?

Isn't debt a bad thing?

Credit vs Debt....

Okay, having credit is extremely important now-a-days, but carrying debt is not. Lets face the facts, unless you're financially independent, you need credit for important things in life like owning a house or buying a car. If you are financially independent and can pay cash for all these thing, good for you, that's a phenomenal accomplishment, but this article is not for you.

Do I believe in carrying debt? Absolutely not, but I do believe in having good established credit so when you need to borrow money for whatever reason, you have the power to do so. 

I personally feel, that one of the biggest problems with Canadians is that we do not know how to differentiate between the two, nor are we disciplined to manage our credit and in turn, turns into debt. The real reason for this, is a lack of understanding when it comes to credit. In our society we have never been taught to manage our credit/debt. 9 times out of 10, we're learning to develop credit and debt from our friends and family. Not to be rude but that's usually the blind leading the blind. Before you seek advice regarding this subject or any subject for that matter, ask that person about their current situtation and then ask where they seek advice from regarding the subject. What you'll find is one person shoveling "BS" which got shoveled on them from another person.

Here are the facts about me....

I'm 29 years old and live a debt free lifestyle. I don't carry a mortgage, credit card debt, student loans or a car loan. I do not live paycheque to paycheque, I believe in saving money and also believe in having a good credit rating. When I was 27 I was in well over $500 000 in debt and did live paycheque to paycheque. I also believe you can't teach what you've never done, this is why I am so passionate about credit and debt.

People need guidance and have nowhere to turn, I'd like to help. Please feel free to contact me or continue to follow my blog.

 

I Have Bad Credit! But It's Not My Fault

I HAVE BAD CREDIT,

 but it's not my fault!

That is a statement I hear on a daily basis. More times than not, it's never the persons fault who has bad credit. However once in a while I get to speak with a person who is not only honest with me, but honest with themselves. Let's go ahead and treat this like a 12 step program and guess what the first step is.... admitting you have a problem.

If you're truly serious about fixing and rebuilding your credit, you have accept blame whether it's truly your fault or not and start on the right path to rebuilding.

Despite what has happened with your credit, there is always a way to fix it. You have to remember that everyone's situation is different and their journey to rebuild will look different than their friend who they work with. My first piece of advice would be to STOP taking advice from your friends who also have bad credit. I promise you they have no idea what they're talking about. Without me going on a rant about this, in short.... be careful who you take advice from. Do not be convinced by the height of their logic only by the fruit on their tree.

Depending on what kind of issues you've had with your credit you can be back on your feet with traditional lending institutions getting prime rate loans within 6 months to 3 years. Sometimes its quick and painless and takes some minor adjustments, others have to dig down deep and spend some more time and money fixing the problem, but if you do it the wrong way it can and will take forever and you may never have good credit again.

Having bad credit is nothing to be ashamed of, it happens to all kinds of people. Doctors, Lawyers, Teachers, Police Officers... the list goes on and on. I have helped people repair their credit in almost every  profession you can think of.

Don't be afraid of it either, it's not that bad or that hard you just need some guidance and understanding. Continue to follow my blog or Contact Me if you have a certain question regarding credit.

Students Establishing Credit

I found an interesting article regarding Students establishing credit. Originally written by Rob Carrick and published by The Globe and Mail. Hope you enjoy it as much as I did.



Give university students some credit.

The banks certainly do. A study of more than 15,000 Canadian university students completing their undergraduate programs found that almost nine in 10 have a credit card, and that 26 per cent have two or more cards. By all means, let’s be concerned about this surprisingly high level of card ownership among students, but first we need the right context. Most importantly, students appear to be diligent about repaying what they owe on time.

The data on student credit card use comes from the latest survey of graduating undergrad students compiled by the Canadian University Survey Consortium, which is a group of universities co-operating to run surveys that tell them more about their students. The survey’s headline numbers on student debt as of mid-year are encouraging – the average amount owed by those with debts was $24,579, down from $26,700 in June, 2009 (the last time this survey was done).

The credit card numbers show that we’re getting an incomplete picture of student debt by focusing only on loans provided by governments and banks. Unlike overall debt, credit cards have become more of a factor in students’ lives. Just over 80 per cent of graduating students had one or more credit cards back in 2003. The comparable number rose to 88 per cent in 2009 and 89 per cent this year.

Let’s start with the bad news on how this is playing out, which is that the average level of debt among the minority of students with unpaid balances on their credit cards rose very slightly to $3,444 in 2012 from $3,440 in 2009, and from $1,279 in 2003. More encouraging is the fact that 82 per cent of cardholding students reported paying their balances off in full each month, compared to 76 per cent in 2009 and 72 per cent in 2003.

Figures from the Canadian Bankers Association show that just over 65 per cent of the broad population pays its credit card bills in full each month. So give students some credit – they’re not the financial illiterates some people think they are.

And yet, a minority of students are getting themselves into deep trouble with their credit cards. The credit card payment calculator presented by the federal Financial Consumers agency of Canada shows it could take 18.5 years to clear a card debt of $3,444 if you just make the minimum payment every month.

In my latest book, How Not to Move Back In With Your Parents: The Young Person’s Complete Guide to Financial Empowerment, I try hard to trash the idea of students with little or no employment income using credit cards. The reason is that, with interest rates of close to 20 per cent, they’re a trap for students who spend carelessly. And, no, I don’t buy the idea that it’s smart to get a credit card as a student because you get a head start in establishing your credit rating. Get a job, then get a credit rating.

But here’s reality: Banks actively promote cards to students, who have shown themselves to be a most enthusiastic audience. In our consumption-driven economy, a credit card is a membership card.
So here’s what we have to do about students and credit cards. First, recognize that the issue of student debt has to include credit card debt as well as money owed through government and bank lending programs. Not a lot of students carry card debt, but those who do are digging themselves in deep.

Second, let’s avoid the blame game in figuring out why some students are using their cards so ruinously. A narrative that comes up when students and credit cards are mentioned is that today’s young adults are spoiled, entitled and clueless about what it means to live within their means. Refuting this is a long-term trend of students consistently getting better about paying what they owe on their cards.

Third, let’s make sure all financial literacy efforts aimed at teens and young adults deliver the message that buying things you can’t afford with a credit card is both the worst and easiest-to-avoid mistake in all of personal finance.

Credit cards are as common on university campuses as beer and raging hormones, thanks to the banks. Some students are burying themselves in card debt, but most aren’t. Let’s give them some credit for that.

Original article:

http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/students-show-their-smarts-on-credit-cards/article4648708/

The Truth About Auto Finance

It's funny what kind of things car dealerships will say to get you in the door. How many people have read or heard about "100% Guaranteed Approval" "We are the bank" "No one is refused!" You always get the same old story but no one ever delivers. The fact of the matter is, not everyone can get approved for an auto loan.

WHAT?????

How is that possible you might ask. How come these car dealerships are allowed to make such false claims in their advertisements? Well, like in all areas of life, there are loop holes. It's simple to guarantee approvals. They'll just tell you "you're approved, we just need $6000 down and payments of $300 a month for 12 months." The reality is, the car dealership has made its money on the initial $6000 and the rest, if you do make the payments is just gravy. Some day soon I'll dive into the myth of the 100% Guaranteed Approval, but not now.

I just want to give you a little bit of hope if you're looking to rebuild your credit. We just finished a deal with a customer this morning who, like you is rebuilding their credit. This customer had a judgment filed against them in 2010, an unpaid collection in 2009 and a written off trade line (R9 on the credit bureau). That's all that was on this applicants bureau, absolutely no positive credit. We were able to secure an approval at an amazing rate of 7.29% and they drove off in their brand new car on the same day.

Buying a car and/or rebuilding your credit does not have to be difficult. If you're looking at purchasing a car or just have questions about the best way to fix or establish credit, please don't hesitate to contact me. I'm always happy to help and give advice.



Come back soon for more useful information. I'll be posting articles and strategies about rebuilding, establishing and maintaining credit. Success stories with our customers and articles regarding the debt load of Canadians and how not to get too overwhelmed.

Got Bad Credit?

What we mean by this is it is okay to have bad credit, as a matter of fact you would be like 63% of all Albertan's according to a recent Finance Alberta study. With that being said we saw an opportunity to assist all Albertan's in finding the right financing for their vehicle purchase.

At Got Bad credit we pride ourselves in working the extra hours, spending the extra time with local bank programs to ensure we are finding every possible way to get you approved and driving in a new vehicle today!

Please take a couple of moments and have a look at our website http://gotbadcredit.ca we are old dogs in this credit world, but we are bringing new school philosophies to the market getting you driving everytime!

You can also keep up to date with our current sales flyer as seen in the Edmonton Sun today

Bad credit car loan

Let’s say you are in the market for an automobile. You’ll be required to make a hefty deposit on the bad credit car loan. I have heard of down payment requirements as high as $3,000 but that is not the only problem you face. Your rate of interest on a bad credit car loan may vary from 19% around the cheap to as high as 29% on top end. A high-mileage car or truck could end up costing you $400.00 or more monthly in monthly obligations. To minimize the damage from all of these high rates, I recommend you begin by calling several lenders. They often both sell and finance the product on the spot. If you can find one whose maximum interest rate is in the low twenties you might be in a position to save a substantial amount of interest payments. You must make sure though, they report your payment history to the credit agencies because this will help to raise your credit score provided you have to pay promptly.