by admin | Bankruptcy, Consumer Proposal, Credit Counseling, Credit Repair
Saving is always better than spending if we are to have a viable and secure lifestyle. While most of us certainly do know this age old adage, yet seldom follow it, which unfortunately leads to our very obvious detriment. Yes, most of us have made sporadic attempts at saving our salaries and funds and do manage to do precisely that, only to splurge all over again and its back to ground zero. This holds eve truer if we have just survived a really bad debt trap. Once the debts have been repaid, we make a solemn promise with ourselves to never ever go down that road again. Only to fall down the same slippery slope because not having debts means we are financially free…. Free that is, to incur more debts, that is we go off on a spending binge.
Think of it alone the lines of eating a healthy diet, till you have achieved your desired weight loss and can put on your old clothes with pride, you keep on dieting with grim determination. Once that has happened, you have no need to diet and you revert to your old eating habits. And before you know it you have ballooned and now pack even more weight than you did even before you started dieting in the first place.
Here are a few pointers to help ensure that you are able to save your money, rather than being in debt.
1. If you have debts, you need to pay them off first thing!
Yes, paying debts is a very, very important part of your financial cycle, but would it not be nicer if you never had debts to begin with? Owing people money and having them ask you to pay back consistently is not really a nice feeling, is it? However, if you have savings, then even if you were in debt all you would need to do would be to dip into your savings and get rid of your debt, once and for all.
2. Save something for a rainy day
Always try and save at least 12% of your total monthly earnings irrespective of what your earning actually may be. Here the key buzz word is ‘consistency.’ If you save for a few months, only to blow away all your savings on the latest model 7.1 surround sound system, than should there be a real emergency that electronic gadget would not be of much use. However, doing so for years would mean a sizable nest egg that you may then invest and thereby earn from your savings. This way, you would be able to buy from the ‘earnings from your savings’ rather then taking loans that you could ill afford to pay.
Conclusion
Yes, it is not easy to curb your expenses and live on only a portion of your earnings, month in month out. You may have to restrict fine dining to a bare minimum and even cut down on your entertainment related activities. But, in the long run, this is the best way to live a relatively debt free life.
by admin | Credit Counseling, Credit Repair, Uncategorized
So you want a bank loan for your business? It’s not all that easy since banks are entrusted with depositors’ money and therefore have to be very careful as to when and where they disburse these funds. Nevertheless, without disbursing loans that they charge interest on, the banks can’t really be in business which is why they can and indeed do give loans to business owners. Following are some key points to take into consideration when applying for a business loan:
1. Double check your credit score
Whenever you apply for a loan from a bank the very first thing they will check is your credit score. This is why it is absolutely essential that you know your credit score in advance before applying for a loan from ‘any’ financial institution whatsoever. Check and double check for any errors or discrepancies. Such errors may include any late payment that you may have made on time but that had erroneously being reported as late. Once such mistakes have been noted down, contact the relevant agency or credit bureau and get them rectified as soon as possible. Preferably before applying for the loan in the first place.
If you have a very high credit score (hovering around 900 in Canada), There is an excellent possibility that you will be able to acquire that coveted loan at an extremely attractive rate. However if your rating is average (If you have a mid-level score (650 to 700), you may certainly get a loan but the interest rates may be higher. But a credit score below 600 may make it very difficult to acquire a business loan because the bank will term you a high risk factor. In this scenario, even if you do manage to get the loan, the interest rates may be so high you might need to seek recourse to an alternative form of financing (such as borrowing from friends and family etc.), or you may reconsider your business expansion plans at this point in time.
Another important consideration to keep in mind is that having your loan application rejected would mean a drop in your overall credit score, effectively making it more difficult for any future borrowings later in life. So be very careful when applying for such a loan.
2. Figure out how much you need beforehand
Before applying for a loan it is necessary to figure out just how much money you need as a loan. You would have to show the bank precisely how you will utilize the amount so that they would be reassured that you would be able to pay back what you have borrowed, on time and with interest. You might need to create monthly cash flow predictions and then follow them to the letter if your loan request is approved by the bank.
3. Think long and hard
Before applying for a loan think long and hard as to why you need a loan and if it’s possible to do without it even if it leads to slower expansion of your business. Check for any alternative to borrowing from a commercial institution if a loan is absolutely necessary. This is because in the eventuality of anything going wrong the bank would be compelled to take legal action to recover its funds and that may include foreclosing on any mortgage or property that you might have put up as collateral.
by admin | Consumer Proposal, Credit Counseling, Credit Repair, Uncategorized
Credit card fraud is an all encompassing term for a form of theft and/or fraud that may be perpetrated though the illegal use of a credit card, in order to purchase goods or services as a fraudulent source of finance in a monetary transaction The purpose may be to either acquire anything without paying for it or alternately to gain access to funds in an account that the individual has no legal right to operate.
There are many broad categories of credit card fraud, these include:
Credit Card theft
Having a card stolen can be a traumatic experience and it becomes even more so if you find yourself being billed for products that you never purchased. Unfortunately, credit card theft is a pretty common phenomenon and it is imperative that a lost card should be reported and blocked ‘as soon as possible’ to avert such losses.
On the plus side though, it is not as easy for prospective thieves to actually steal credit cards and buy stuff with them. This is because more and more merchants now ask for at least some form of identification when they are being paid though credit cards. Additionally many credit card facility providing financial institutions also add a photograph of the owner’s face to the card’s front side as a security measure. While these may not be fool proof measures but they have helped mitigate losses resulting from credit card theft to an extent.
Account takeover
An account can be said to be ‘taken over’ when a fraudster manages to acquire the personal information of a credit card holder (such as mother’s maiden name, date of birth, home address and other personal information). The prospective swindler then approaches the cardholder’s bank all the while pretending to be the original card holder, he informs them that he has lost his card and has also shifted his address. Once the card is delivered to him in the name of the original owner, he may be able to steal at will till the original card holder finds out what is happening and has the card blocked.
Skimming
This is by far the most common method of credit card fraud. Skimming works by putting a legitimate card in a machine that looks just like an actual credit card reader. But in reality the machine, unlike a conventional card reader saves all the details of the card. These details are then extracted and computer hackers may use them to make unsecure transactions or even create new cards from them altogether.
”Borrowing” the card
When you hand over your card to a gas station attendant or a waiter in a restaurant when making a payment, he has the opportunity to note down your card number as well as other details. These can then be used to make unauthorized online transactions in your name.
Phishing
This is also another well known form of credit card fraud. Instead of stealing or ‘borrowing,’ the fraudster deceives his victims into disclosing their credit card details. He may call them pretending to be a bank officer or send them emails promising them winnings in a lottery ticket. Some net savvy swindlers have even been known to create websites identical to original bank sites. Once the data is entered, the thieves go to work immediately transferring either funds or buying expensive products online.
Conclusion
Irrespective of the method used, using a credit card without due authorization is considered stealing in Canada and as such is considered a criminal offence in the eyes of the law.
by admin | Bankruptcy, Consumer Proposal, Credit Counseling, Credit Repair, Uncategorized
When you go to a creditor in order to get a loan, the first thing they want to know is your credit rating. A credit score is something that summarizes your credit history including your present financial condition. This is basic credit scoring, but there are certain areas of credit ratings that most people are unaware of. Following are some of them:
- Something as simple as paying your bills on time is something that could actually enhance your credit score.
- It is not only your financial history, but also a bad public record that can lower your score by a good margin.
- A bad credit score can even cause hindrance in getting the desired job. Many employers judge professionalism on the basis of how you manage your life – most importantly, your finances!
- If you have a good credit limit, you don’t have to use all of it. It is recommended to keep within thirty percent of your credit limit to keep your credit score in a good condition.
- Clearing your mortgage does not help in improving your credit score. Instead, when you’re not paying mortgage (even due to the fact that you have cleared the full payment on it), your credit points get reduced.
- Those old accounts that you no longer use might still be of use. The main reason for this is because your new creditors will feel safer when they get to see your long, healthy credit history. Unlike common belief, shorter (even though clean) credit history is not as good as a longer (and fair) one.
- Opting for a secured credit card is a better option for starters as compared to choosing an unsecured one, right away. In most cases, taking an unsecured credit card is not an option for people having no credit history.
- Don’t focus all your credit on a single loan instrument. Try to keep a mixture of different products like a credit card, a car loan, and a home mortgage etc. Focusing all your credit at one instrument is not considered very healthy.
- Looking to rent a place? Even landlords take a look over your credit ratings before renting the place, just to make sure that you don’t default on the rent payments.
- A credit score above 650 is considered a good score.
- In Canada, Equifax and TransUnion are the only agencies for credit reporting.
- Even staying at a single place for a longer period of time can improve your credit ratings.
- Try sticking to one or two credit accounts at most. This will help you manage your finances in a better way as opposed to having a lot of accounts. Furthermore, make sure your accounts have very little to no balance. This will help you in maintaining or even improving your credit score.
There are a lot of things that affect your credit scores. Therefore, to maintain a good one, you should be aware of most, if not all, of the factors that help in building a good credit rating. Damaged your credit rating already? Contact GTA Credit Solutions Services Ltd. (GTA CREDIT) to help you in getting your credit scores back on track.
by admin | Bankruptcy, Consumer Proposal, Credit Counseling, Credit Repair, Uncategorized
A number of Canadians are finding themselves under insurmountable debts. Whether it is because of some medical needs, student loans, mortgage loans, credit card loans or any other loans – when these debts get overwhelming and people start spending more than they can pay back, they are left with two options. These alternatives are consumer proposal and bankruptcy. Both of the options can help you get out of the debt; however, both have different ways to go about doing that. Below, we will discuss which option out of these two is the best for which type of candidate.
Candidate for Consumer Proposal
Consumer proposals are best for those individuals who want to keep their assets protected, and have a stable flow of income. The reason is that the creditors in this debt management are more interested in how much the individual earns, as that is the asset for them. They do not want your liquidated assets. Being insolvent and having a stable wage makes you an ideal applicant for consumer proposal. In addition, you will also be entitled to pay all the taxes.
Once you settle for consumer proposal, you have power over your finances and assets. The decision regarding what to do with the vehicle or home is entirely yours rather than of any bank or trustee. Additionally, the reports regarding bankruptcy will be sent for only 3 years.
Moreover, there are certain limitations of consumer proposal itself that are necessary conditions to be eligible for it. Not having the debt of more than $250,000 other than mortgage, and inability to payback the entire debt are some of the conditions, and even meeting the conditions do not necessarily provide you with the creditor’s acceptance. You will receive a certificate whenever your proposal is approved.
Candidate for Bankruptcy
On the other hand, people who are right candidates to file for the bankruptcy are those who want to free their unsecured debts. To be qualified to file for personal bankruptcy in Canada, an individual has to be under the debt of more than $1,000. This will provide the individual with financial relief and guard them from their creditors.
To settle the debt, the individual needs to be aware that they have to give up few of their assets. Moreover, the bankruptcy will remain for 6 years on your credit rating if it is your first time declaring bankruptcy. Those who get automatic discharge will find bankruptcy on their credit rating for less than seven years. Lastly, you are not obligated to pay the taxes, as you cannot afford to pay.
You can take help of counselors who can guide and advise you on your debt problems, and ways to deal with it. A professional insight will surely be supportive to help you move forward and take responsibility of your actions, and give you a financially fresh start.
by admin | Bankruptcy, Consumer Proposal, Credit Counseling, Credit Repair, Uncategorized
Consumer Proposal is the answer to serious debt problems in Canada. It is a legal agreement between the lender and the creditor that offers the creditor a chance to payback an amount that is lesser than their debt. Insolvent individuals, who cannot pay off all their debt on time, and do not own any such assets, can qualify for consumer proposal.
There are a lot of advantages of considering consumer proposals over bankruptcy. Some of them are discussed below.
1. Reduced Payback Debts
When an individual, who is under a huge debt, files for consumer proposal, their debt is reduced. This means that after filing for consumer proposal, they only have to pay up to 30% of their debt amount. This encompasses collection debt, credit card debt, income tax debt, overdrafts, and line of credits.
2. Protecting the Assets
Unlike bankruptcy where your assets can be taken away from you, consumer proposal protects them once it gets accepted. These comprise of your vehicle, cottage, house, RESPs, and RRSPs. While you are managing your debt, you need to protect your assets too, because these are the only things you are left with after your retirement. Nevertheless, you just need to keep making payments till the duration that has been accepted by your creditor.
3. Affordable
Not only is the process of filing for consumer proposal less expensive, but also the amount you are supposed to pay to the creditor is decided on the basis of your financial capability. Additionally, it takes around 60 months to pay off the proposal therefore; you can save the debt repayment amount by saving from your monthly expenses and become debt free once the period of 60 months are over. By paying at least a particular amount of your debt, you will feel an ownership and responsibility of doing something about the problem yourself. Moreover, this option is best for people who cannot pay the entire amount, but can pay back some of their debts.
4. No Legal Actions against You
Once the application for the consumer proposal is submitted, you will be protected against any legal actions taken by the creditors, such as garnishment of the wages and harassing phone calls. You will not find these benefits in other debt reduction alternatives. Other debt managements take place through the negotiation between the lender and creditor.
5. Simpler Process
The process to carry out consumer proposal is quite easy and uncomplicated. You can take the help of a counselor to create a proposal that the creditors will agree on, and is also in accordance with your interest and budget. Filing of the proposal is the next step, and lastly, after you have gotten a green light from the creditor, you will make payments on a monthly basis.
If bankruptcy is your least favorite option, then apply for consumer proposal. You can also take help of counselors that are experienced in the field to help you decide on which options you should settle for.
Saving is always better than spending if we are to have a viable and secure lifestyle. While most of us certainly do know this age old adage, yet seldom follow it, which unfortunately leads to our very obvious detriment. Yes, most of us have made sporadic attempts at saving our salaries and funds and do manage to do precisely that, only to splurge all over again and its back to ground zero. This holds eve truer if we have just survived a really bad debt trap. Once the debts have been repaid, we make a solemn promise with ourselves to never ever go down that road again. Only to fall down the same slippery slope because not having debts means we are financially free…. Free that is, to incur more debts, that is we go off on a spending binge.
