What is Credit?

Credit is what you use to buy products or services today and pay for them at a later date. This includes credit cards, personal loans or mortgages, and familiar services such as your telephone and cable. In return for paying later for something you can enjoy today, you are often charged interest or service charges by the creditor. It is important that you do pay later and on time, because your credit history will have an impact on your financial health now and in the future.

Once I get credit, how do I keep it?

Keeping credit is easy. Just honour the terms of your agreement by making your payments. Missing payments, making late payments or consistently exceeding your authorized credit card limit will negatively affect your future credit privileges. Every form of credit you carry, including your Government Sponsored Student Loan and your credit card, is an important part of your credit history and can affect your credit rating.

Creditor Insurance

Creditor insurance is a way to protect you and your family from the unexpected. Creditor insurance ensures your mortgage, personal loan, personal line of credit or credit card debt won't be a burden to your family in the event of your death, disability, or involuntary job loss.

Tips
A basic budget: Draw a chart. Down the left hand side, list your income and expenses (i.e. rent, clothing, food, etc). Allow for a subtotal for both. Along the top, draw 3 columns and name them Planned, Actual, and Difference.

If you have ‘one-time' costs, consider a loan of a set amount. However, a Line of Credit could be better for ongoing, unanticipated costs (you discover the roof in the den leaks!) that are often part of moving.

The information in this article is general only; it is not intended as specific investment, financial, accounting, legal or tax advice for any individual.