Top Tips to Avoid the Debt Trap

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Several years ago I found myself reading a silly little novel Confessions of a Shopaholic [bang head on wall]. Clearly, this is time out of my life I’ll never get back, but I didn’t bring this up to make you all privy to my terrible choices. I bring it up because recently, while scrolling the headlines, an article on the rising debt toll in Canada caught my eye and that ridiculous book came to the forefront of my thoughts.

In Confessions, the main character manages to accumulate an obscene amount of debt, completely ignoring notice letters and collector calls. I remember thinking to myself, “good gracious, what an idiot – how can she just accumulate debt like that and not want to off herself!”  (warning – I may have a flare for the dramatic).

Yet as I made a mental checklist of my current situation: Mortgage payment – check, Car Payment – check, credit card debt – check, I wondered if I was perhaps a tad too arrogant and judgemental of this spend happy queen … hmmm glass house perhaps?

With the Canadian debt toll over $27,000 debt per person in Canada, it would seem many of us are in the same sinking ship. To be fair Canadians continue to keep up with their payments, that dark gloomy debt cloud lurks above many of our heads.

What’s the big deal? Well, your personal credit score is just as important as some of the other important numbers in your life…your blood pressure, your body mass index and your waist measurement. This number is based on personal credit management such as collection, length of credit history, types of credit cards used and applications for new credit.

Financial institutions calculate your credit score, which determines what type of interest rate you will receive on a mortgage or credit card. Many other institutions are now using credit scores to calculate how high your health and auto insurance premiums will be as well.

So to help you sleep a little sounder, here are a few tips on maintaining that solid credit rating.

Tips for Those Who Want a Solid Credit Rating:

Additional Tips for those who Need a Little Credit Boost: