Financial Tips

1) Don't give your credit card or bank account numbers to anyone unless you're making purchases with them, and don't put credit card numbers on cheques.

2) When using a credit or debit card, always take the receipt with you.

3) If asked for your SIN for ID or transacting, be wary. You are only required by law to give your SIN to your employer and for income tax purposes, no one else.

4) Want to know how your credit score is determined?
35% is your payment history
30% is made up of the amounts owed on each account
15% is how long you've had the accounts
10% is new credit (new accounts opened or inquiries made for more credit)
10% is type of credit (credit cardsstudent loans, mortgages, store cards, etc)

5) A sobering thought:
In 2008, average household debt was $90,700 - that's up 71% from 1990, or 6 times faster than increases in income.

6) A sobering thought:
In 2008, household debt reached 140% of disposable household income, up from 91% in 1990.

7) Credit Repair:
no one can require a credit bureau to remove accurate negative information before the legal time is up.

8) Credit Repair:
There are no 'loopholes' or laws that credit repair companies can use to get correct information taken off your credit report.

9) Credit Repair:
No credit repair company can do anything you can't do for yourself.

10) The only way to 'repair' bad credit is with good credit practices over a period of time.

11) Beware of emails that look like they are from your bank, asking you to visit a website or give your personal information, account #s or PIN #. Banks will never contact you in this way. Always verify that any email received from a financial institution is legitimate by calling the number on your statement or bank card and speaking to a customer representative.

12) How to Improve Your Credit Score:
- always pay your bills on time
- try to pay your bills in full by the due date. If you can't, then at least pay the required minimum amount by the due date
- do not exceed your limit, and try to keep your balance substantially below the limit
- limit the number of credit applications you make: too many and you begin to look like a 'credit seeker'
- request a copy of your credit bureau history and check it for errors. You are entitled to one free report on yourself each year.

Consumer legislation allows consumers the opportunity to request a copy of their credit bureau histories once a year free of charge. This provides the opportunity to correct any mistakes and errors in reporting. So asking for a copy each year is smart self-help available to everyone.

For anyone who has encountered financial difficulties, a 'Money Coach' is a great and inexpensive resource. With these folks the idea of simply drawing up a budget for you is old, OLD, OLD!!!. They do so much more, you'll wonder how you got this far without one. They determine how money-savvy you really are (not how you may think you are!), design a strategy specifically for you to take control of your personal finances and move forward, take you from where you are to where you really want to be, and are there to help you every step of the way. Want to know why you view money matters one way and your spouse looks at them completely differently? Want to feel comfortable talking with others about money, or investments, or savings, etc? Been through a bad financial time, got past it and want to move ahead but don't know how? Find yourself a money coach. They're worth their weight in gold.

Here's an interesting way to re-establish your credit. Ask your banker that you'd like to buy a $5000 five year Guaranteed Investment Certificate (or GIC). Your banker will say fine, let's see your $5000. Well, you'll explain, you really don't have $5000, but can you borrow it from his bank? Because this is a 'secured' loan - the bank has a piece of paper saying you owe them $5000 which is offset by another piece of paper saying you now have $5000 on deposit - chances are pretty good that you'll be approved. Now all you have to do is ensure a payment is made to the bank each month, without fail. Both the loan and the record of your payments will be reported on the credit bureau and, if you're paying the full payment on time each month, your credit bureau history will soon start looking pretty good. As an added bonus, you will have managed to save $5000!

Once you're financially back on track, a good habit to get into is to 'pay yourself' every payday. Simply, it is taking 5% or 10% (if you can save more, that's a bonus) of your paycheque and setting it aside in a separate bank account. Or put it towards paying off a GIC loan, like above (if you get a demand loan for the GIC, that's the best, because you can pay off as much as possible as often as possible). The idea is to establish some financial discipline. You want to do things and achieve success - well, you need money. Saving 5% or 10% is not as big a sacrifice as you might think; after a while and a bit of adjustment you won't even notice it.

Do you know the difference between 'good debt' and 'bad debt?'

Here's a generalization. Bad debt is debt acquired buying something you should have bought for cash had you only had the cash. That's virtually every purchase on your credit cards, your car, the washer and dryer, and 'the toys': hot tub, boat, motorbike, satellite dish, computer, plasma TV, etc, etc. All this stuff, if bought on credit, is costing you a fortune in interest charges, while the stuff you bought is rapidly depreciating.
So that's bad debt.

Now good debt is an RRSP loan (you get savings for retirement and a tax break), a student loan or business loan (because these are helping you improve your life), a mortgage to buy your house (a form of saving), borrowing money to invest like a GIC.

K & G Debt & Credit Professionals care about your situation and want to help.

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