Introduction
Having a good credit rating is one of the foundations of good financial health — whether it’s for getting a phone account or a credit card, an apartment or a mortgage, you’ll need to have a good credit record! So here’s some advice to integrate into your financial strategy:
1. Always make your minimum payment by the due date
Although this seems rather basic, it can’t be repeated often enough! Making your minimum payment by the due date is vital for keeping your credit record spotless.
In addition to managing your studies and exams, it can be difficult to keep track of other deadlines; you can normally set up automatic payments with your credit card issuer to avoid missing a payment.
2. Establish a strategy to pay off your debts
Managing your student debt, your car loan and your credit card at the same time can sometimes seem like an insurmountable task; that’s why it’s important to establish a strategy to pay off your debts.
Snowball method: start by paying off your smallest balances to stay motivated and get a sense of accomplishment as your debts are gradually paid off.
“Interest rate” method: start by paying off the debts with the highest interest rate to avoid accumulating interest charges.
Nothing prevents you from combining the two methods to save interest while staying motivated as you gradually pay off your debts!
3. Consolidate your debts
Juggling several debts at once can be overwhelming: weekly payments, monthly payments… that’s a lot to manage! Depending on your financial situation, your debts could be easier to manage by consolidating them: you would then have only one payment to make and you could possibly extend your term, with a payment that’s easier on your budget.
4. Apply for bursaries
Although bursaries are offered more selectively, getting one (or more!) could help you improve your cash flow and pay off your existing debts. For graduates, there’s also the Quebec government’s Loan Remission Program, whereby, under certain conditions, 15% of your student loan debt can be forgiven.*
5. Avoid going into debt needlessly…
…with the help of a budget
Setting up a budget is one thing, sticking to it is another! By making a budget, you’ll be able to keep track of your expenses and your income (if any) during your studies in order to find the right balance. Obviously, it’s important to review your budget when you finish your studies, when new factors will have to be considered.
We also advise you to regularly monitor your budget to help you, among other things, limit your debt.
*https://www.quebec.ca/en/education/student-financial-assistance/repayment/loan-remission
