Several years ago I found myself reading a silly little novel Confessions of a Shopaholic [bang head on wall]. Clearly, this is time out of my life I’ll never get back, but I didn’t bring this up to make you all privy to my terrible choices. I bring it up because recently, while scrolling the headlines, an article on the rising debt toll in Canada caught my eye and that ridiculous book came to the forefront of my thoughts.

In Confessions, the main character manages to accumulate an obscene amount of debt, completely ignoring notice letters and collector calls. I remember thinking to myself, “good gracious, what an idiot – how can she just accumulate debt like that and not want to off herself!”  (warning – I may have a flare for the dramatic).

Yet as I made a mental checklist of my current situation: Mortgage payment – check, Car Payment – check, credit card debt – check, I wondered if I was perhaps a tad too arrogant and judgemental of this spend happy queen … hmmm glass house perhaps?

With the Canadian debt toll over $27,000 debt per person in Canada, it would seem many of us are in the same sinking ship. To be fair Canadians continue to keep up with their payments, that dark gloomy debt cloud lurks above many of our heads.

What’s the big deal? Well, your personal credit score is just as important as some of the other important numbers in your life…your blood pressure, your body mass index and your waist measurement. This number is based on personal credit management such as collection, length of credit history, types of credit cards used and applications for new credit.

Financial institutions calculate your credit score, which determines what type of interest rate you will receive on a mortgage or credit card. Many other institutions are now using credit scores to calculate how high your health and auto insurance premiums will be as well.

So to help you sleep a little sounder, here are a few tips on maintaining that solid credit rating.

Tips for Those Who Want a Solid Credit Rating:

• Treat your credit cards like cash; deduct money from your chequing account every time you make a purchase
• Pay the entire balance of your credit card each month
• Limit the usage of credit cards to two or three maximum and select cards with no annual fees, 25-day grace bill periods, rebate incentives or other incentives (airline mileage, auto points, etc.) programs and single-cycle billing
• Use your credit card with incentives for regular expenses such as groceries, utilities and gasoline.
• Conduct an assessment of your expenses quarterly and make adjustments to your spending if you are going over budget.

Additional Tips for those who Need a Little Credit Boost:

• Enrol in a pre-paid credit card program in which you load money onto the credit card for purchases. Once you’ve reached your set limit, the card will not work.
• Establish a budget that includes a debt repayment plan monthly. As you pay off balances, call the creditor and ask them to close your account so that you are not tempted to use the card again.
• Seek out financial assistance if you feel overwhelmed by debt. By reaching out to a financial advisor, you will be able to find specific ways in which you can minimize your debt and improve your personal financial situation.