50 Shades of Bad
November 15 2012 Posted by Mary Poburan
50 SHADES OF BAD...
Well Monday with Mary didn't quite happen yesterday as I was on a Facebook Hiatus. I had my first experience with a hacker and it was not pleasant.So this week. Mondays with Mary is on a Tuesday...Fitting for a Full Moon Week.
One of the first questions I ask my clients is "What do you know about your credit?" Interestingly enough, few people know how to definitively answer that. When the response is "I don't think its that great", I try to find out why they think that and what factors may impede their ability to obtain a mortgage. How Bad is Bad? Several factors will affect credit.
1) Collection items...no amount is good. It doesn't matter if it was for a 50.00 parking ticket. A collection is never a good thing.Having a story can help(and everyone has a story) but once it gets to that point the damage is done.
2) Bankruptcy...one would assume this is a given but you'd be surprised how many people fail to disclose a current or past bankruptcy. Gaps in a credit timeline are easy to spot.Obtaining credit after bankruptcy is difficult but it is required. Usually 2 pieces of credit are needed for at least a year in order to reestablish credit worthiness with lenders.
3)Late payments..Due dates are there for a reason. This is not the date you send off the cheque in the mail, or even the day you pay online. This is the date when the money needs to be RECEIVED by the creditor.Late is late.Making a payment BEFORE the statement date is just as bad. It will not be recorded in a statement cycle and therefore it will be LATE!
4) Credit seeking...Needing credit but the answer is "no"? Asking 5 more places for credit is a bad sign of credit behavior. Seek experienced advise on how to approach a credit application with best disclosure. Sometimes you only have one chance to get it right. Repeated attempts at obtaining credit can further damage your credit score.
5) Maxed out credit...Having credit is good, making payments on time is great but being at or over your limit is BAD. Ideally your credit balances should be below 75% of your authorized limit. Often clients will say, "I've never missed a payment" but all of their credit is maxed out. Robbing Peter to pay Paul is not something to be proud of.
Credit is a delicate thing. It needs to be treated with care and responsibility. Awareness and knowledge is key. Do you know how strong your credit is? Everyone should know the answer to this questions. Go online today and see your report.
Well Monday with Mary didn't quite happen yesterday as I was on a Facebook Hiatus. I had my first experience with a hacker and it was not pleasant.So this week. Mondays with Mary is on a Tuesday...Fitting for a Full Moon Week.
One of the first questions I ask my clients is "What do you know about your credit?" Interestingly enough, few people know how to definitively answer that. When the response is "I don't think its that great", I try to find out why they think that and what factors may impede their ability to obtain a mortgage. How Bad is Bad? Several factors will affect credit.
1) Collection items...no amount is good. It doesn't matter if it was for a 50.00 parking ticket. A collection is never a good thing.Having a story can help(and everyone has a story) but once it gets to that point the damage is done.
2) Bankruptcy...one would assume this is a given but you'd be surprised how many people fail to disclose a current or past bankruptcy. Gaps in a credit timeline are easy to spot.Obtaining credit after bankruptcy is difficult but it is required. Usually 2 pieces of credit are needed for at least a year in order to reestablish credit worthiness with lenders.
3)Late payments..Due dates are there for a reason. This is not the date you send off the cheque in the mail, or even the day you pay online. This is the date when the money needs to be RECEIVED by the creditor.Late is late.Making a payment BEFORE the statement date is just as bad. It will not be recorded in a statement cycle and therefore it will be LATE!
4) Credit seeking...Needing credit but the answer is "no"? Asking 5 more places for credit is a bad sign of credit behavior. Seek experienced advise on how to approach a credit application with best disclosure. Sometimes you only have one chance to get it right. Repeated attempts at obtaining credit can further damage your credit score.
5) Maxed out credit...Having credit is good, making payments on time is great but being at or over your limit is BAD. Ideally your credit balances should be below 75% of your authorized limit. Often clients will say, "I've never missed a payment" but all of their credit is maxed out. Robbing Peter to pay Paul is not something to be proud of.
Credit is a delicate thing. It needs to be treated with care and responsibility. Awareness and knowledge is key. Do you know how strong your credit is? Everyone should know the answer to this questions. Go online today and see your report.
Equifax Canada - Credit Monitoring
www.econsumer.equifax.ca
Equifax Complete™ Advantage Plan from Equifax Canada helps keep you informed of your credit and financial health.You'll know by the next business day if there have been certain changes to your credit report.
