Top 7 Signs You’re Headed For Credit Trouble

Prevent Yourself From Drowning In Debt

Life can be hectic enough without having to worry about your credit situation. According to Equifax, Canadians are carrying an average debt load of around $22,081 excluding mortgages. Let's take a look at the top 7 signs you’re headed for credit trouble

1. You have no wiggle room

Living without ‘wiggle room’ means that if anything unexpected were to happen, such as a medical emergency, a reduction of income or a rise in expenses, you would have to handle it with credit. In other words, you have nothing saved. You have no emergency funds and are banking that the status quo never changing.

If this describes your lifestyle, be sure to understand that you’re at risk of falling into serious credit trouble. There’s a reason why the financial gurus tend to say that saving an emergency fund is among the top priorities when it comes to financial well-being.

2. You can’t remember the last time you set a goal to pay a debt

Is repaying your debts a priority? If not, then you could be relying too much on credit and potentially headed for credit difficulties down the road. Make a point of sitting down and assessing what you owe. Figure out where you can cut down on your spending, and work out a plan to eliminate your debts before it’s too late.

3. You are actively ignoring your loan and bill payments

If you’re someone who actively ignores loan or bill payments, then it’s likely that you’re already experiencing credit problems. If you’re not actively meeting your basic minimum requirements on your bills, you’re on a road that leads bankruptcy or garnished wages.

You need to take immediate countermeasures in order to remedy the situation before your world becomes drastically more complicated. Make a game plan, sort out what you owe and begin making contributions towards the debt. This is going to require sacrifice and self-discipline, but it’ll pay off in spades when you’re debt free and have a great credit score.

How much trouble can you get in when you miss the odd bill or two? Read our blog: ”Late Payment? How Much Will This Affect Your Credit?”

4. You have no more room on your credit cards

If you’re in a position where your cards are maxed out and you’re unable to use them for even modest purchases, you’re likely headed for credit trouble. You need to take a close look at your spending habits in order to find out where you can cut costs. Funnel as much as you can afford towards your cards and get out from under your debt ASAP.

5. You have no idea how much debt you’re carrying

People tend to handle stress differently. When it comes to finances, a common instinct is to avoid it altogether. Unfortunately, the big ‘A’ word: avoidance, will lead to the big ‘B’ word: bankruptcy. Debt won’t disappear unless proactive steps are taken against it. Facing the reality of your debt situation head on is the first step to tackling it.

6. You are spending outside of your means

How can you tell if you’re living beyond your means? It’s easy… If you’re spending more than you’re bringing in, you’re living above your means. The best way to fix this is to take stock of what’s coming in and what’s going out. Identify where you can cut your spending, and stick to it!

Overspending is a sure fire way to get into debt. Read our blog: “Credit Recovery Tips - How to Stop Spending!”

7. You have never checked your credit score

Many Canadians have never checked their credit score, but have an understanding of where you sit is highly advantageous. As a Canadian, you are entitled to one free credit report from each credit bureau per year - take advantage of this and get ahead of the game! Click here to find out your Canadian Credit Score.

Stop the Signs Of Your Credit Problems Today

One of the most effective methods to avoid credit problems from taking over your life is to take advantage of  credit building programs like the ones offered by Refresh Financial. We offer secured credit products that have no up-front fees. They report to the credit bureaus just like a traditional loan. These programs are low-risk, cost effective and one of the fastest ways to boost your credit score! Click here for more information.