| By :
Molly Wider
If you're like thousands of others, last year was a bit of a financial disaster. Paying bills late, not making credit card payments on time, phone calls coming in reminding you to pay an account were common occurrences for so many people in 2009. As a result of these, credit ratings can take a beating. You may be asking, just how important is a credit rating anyway? A credit rating is a legal track record of your financial responsibility. This record is housed at Equifax and TransUnion Canada and your record indicates if you are worthy of receiving credit. Landlords, utility companies and other businesses who 'lend' you something want to know just how responsible you are. When you have poor credit it's generally much more difficult to obtain a mortgage, a car, loans and even a cell phone. Poor credit can seriously hamper your ability to rent an apartment, appliances or furniture. Even those places that advertise 'no money down and no payments til next year' will not consider poor credit because when they say 'OAC', that means 'on approved credit.' It's a new year and why not take the opportunity to do something to improve your credit rating? Take out a loan to help toward existing debts, making home improvements or to take a mini-vacation. It may sound crazy, but by getting a loan and making payments on time will help to re-establish your credit rating, and this is a good thing. Many people may consider a loan to lower their credit card balances. Perhaps the thought of another monthly payment may sound overwhelming, but lowering those credit card balances also works in your favor to improve your credit rating. Many people may not realize this, but a credit card balance that exceeds 75% of the credit limit is frowned upon and is reflected negatively at Equifax and TransUnion Canada. If you have a card that's maxed or coming close to being maxed, then lowering that balance is really important. For those with bad credit who have a hard time obtaining loans with standard financial institutions, there are alternatives. One such alternative is a car title loan which uses your car as collateral against your loan. Since these loans are secured, they are much easier and faster to obtain than a standard loan. Getting a loan to improve your credit rating only makes sense. No matter what your credit rating is, there are options.
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