Fixing broken credit – Marble’s exclusive rights to point deduction technology in Canada
61% of Canadians have a credit score of 750 or above, scores which are considered between “good” (720-779) and “excellent” (780-850). Although credit scores are measured on a scale between 300 and 900, it’s considered largely impossible to achieve a score above 850. However, as anyone who’s ever taken a class that was graded on a bell curve knows, a few bad scores can go a long way to tanking an average. Despite only 3% of Canadians having sub-520 credit scores, considered “extreme risk” (approximately 900,000 out of 30 million active accounts), the national average of 650 lands firmly in the “below average” zone between 625 and 680, which is also, unfortunately, where MY credit score is hanging out.
I spent a decade living paycheck-to-paycheck, working in an industry that paid badly and encouraged a lifestyle that made saving difficult. Sometimes bills got paid on time, sometimes they didn’t. I lived over my credit card limit, and to my surprise, was pre-approved for another card with a ten-times higher limit. You can guess how that went. As overdue payments became more common, and interest kept accruing, it got easier and easier to take a lesson from the humble ostrich, arguably nature’s second-least majestic bird (read: giant, violent super-turkeys), and bury my head in the sand until tomorrow, especially when today had problems like rent and groceries. Unfortunately, by the time tomorrow came, the damage was done.
When I was doing my research on how to repair my credit score, I kept seeing the same advice come up, from banks, companies like Equifax and TransUnion, and even the government of Canada:
- Make payments on time,
- Keep the amount of credit you use low,
- Increase the length of your credit history,
- Don’t apply for new credit or loans unless you’re SURE you qualify, and
- Diversify the types of credit you have.
These are good, active steps to take that also don’t address the root of the problem. So, I came up with my own 3 step system.
- BE HONEST WITH YOURSELF.
Don’t hide from the reality of your financial situation. You’re the only person who can make the changes that you have to make in order to fix it, and if you pretend it doesn’t exist, it’ll only get worse. Sit down, open a bottle of wine, drink most of it (or don’t, whatever makes you happy), and have the worst existential conversation with yourself that it’s possible to have, because it leads directly into step 2.
- MAKE A BUDGET.
The thing about fixing your credit is that it requires sacrifice. It sucks, but that’s just a fact. Unless your income drastically changes, you are going to have to make some cuts in order to contribute more toward paying off your debt. Know how much money is coming in, and how much is going out. Make sure the necessities of life are taken care of, and then start hacking away luxuries.
- DO ALL THAT OTHER STUFF.
All those methods that we already talked about are more manageable when you’re working from a position of knowledge. Personal financial management platforms, like Marble Financial’s MyMarble can help as well. MyMarble provides users with a real-time look at their personal finances, including account balances, credit information, spending habits and more. Better yet, their “Free” plan is exactly what it sounds like–free, and designed to give users the kind of personalized insights that people get from professionals, even for people who can’t typically afford it.
At the end of the day, it’s important to remember that fixing your credit is, above all else, doable. The tools you need are in front of you. The hole’s never so deep that you can’t dig out of it – take it from someone who’s digging right there with you.