Financial Consumer Agency of Canada
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Financial Consumer Agency of Canada

www.fcac-acfc.gc.ca

 

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  3. > Choose a Life Event
  4. > Dealing with Debt
  5. > Rebuilding Your Credit
  6. > Using Credit Responsibly When You Are In Debt

Using Credit Responsibly When You Are In Debt

  • If you are not able to pay the full balance of your bills every month, pay at least the required minimum amount shown on your monthly statement by the due date. Keeping a good payment history goes a long way with your creditors, and keeps your credit rating in good standing.

  • Contact your creditors if you are having trouble making payments. They often have payment plans or other options to help customers pay their bills.

  • Make sure that your monthly account statement is correct. Don’t ignore bills because you cannot pay them. Mistakes happen, and you only have a limited time to correct them before you have to pay for them.

  • Carefully read the statements and other materials you receive from your credit card company, third-party lender or financial institution. Changes to your agreements can result in changes to fees and how they are applied, your interest rate or how your payments are calculated.

  • Deal with companies you know and trust. Some companies will promise to eliminate part of your debt, negotiate better deals with your creditors, or offer you loans when you cannot get them anywhere else. If it sounds too good to be true, it often is. Look into a business carefully before deciding to work with them.

  • Get a copy of your credit report for free annually from the two credit-reporting agencies, Equifax and TransUnion, and make sure they are accurate.

  • Live within your means and your budget. Set a realistic budget and try to cut back or cut out unnecessary spending.

  • Understand your “needs” versus your “wants” and do not buy impulsively. The true cost of that impulse purchase can be very high when you factor in the interest and how long it takes to pay it off in full.

  • Understand the total cost of your loans, including interest, fees, penalties and how the debt burden will affect your budget and ability to achieve your financial goals.

  • Don’t use your credit cards or line of credit if you are having problems making the payments.

  • Don't accept or use any form of credit until you understand and are comfortable with its terms and conditions.

  • Don't wait to report any unauthorized transactions on your account. Contact your credit issuer immediately if your statement includes items you did not authorize.

  • Don't go over the credit limit on your credit card.

  • Don’t apply for a lot of credit at the same time—avoid having too much credit available.

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Date Modified:
2011-05-13