Review All of Your Options to Get the Best Credit Repair Help in Lethbridge
Some credit repair companies in Lethbridge are trying to sell expensive services that often saddle people with more debt and don't provide many with the value they'd expect to receive. On top of this, when some people aren't able to make the payments on their new credit repair loan, the credit repair company can send the loan to collections which puts these people in jeopardy of having worse credit than when they signed up for the program. While this may be unsettling, there is some good news. In Lethbridge you can repair and improve your credit for free – and often get better advice and more one-on-one help than a lot of credit fixing companies provide. Keep reading and we’ll show you how to do this.
How to Fix & Repair Bad Credit for Less Than Credit Repair Companies, Services, & Agencies
The goal of credit repair services is to help each of their customers improve his or her credit score. The primary way many of them do this in Canada is by providing credit building loans. The idea is that this loan will create some new good information on someone’s credit report, which shows the credit scoring system that this person is able to borrow responsibly.
This method likely helps a good number of Canadians boost their credit score, however in our minds, it’s a much too expensive option for a lot of people. The credit building loan allows the credit repair companies to charge interest and fees for their service every month over several years. But we believe there is a better solution that is cheaper and more effective.
Advantages of a Cash Secured Credit Card Versus Credit Building Loan to Improve, Restore or Fix Your Score
Compared to a credit rebuilding loan, a cash secured credit card is a much quicker – and in our experience – a more effective way to improve, restore, or fix your credit score in Canada. A cash secured card requires you to deposit money as security for a card. The cash security that’s needed can be as little as $225 or $350. This card is then just like a normal credit card.
Here are four advantages of a cash secured credit card versus a credit rebuilding loan:
- A cash secured credit card can give your credit score a much faster and bigger boost than a loan as long as you don’t carry more than just a small balance on your card.
- It is a lot less expensive than most credit repair loans for two simple reasons: it only has one annual fee, and you aren't required to pay any interest or fees if you completely pay off your balance every month.
- It is much easier to afford because you don’t have to create some room in your budget for a monthly loan payment and/or a service fee. You can instead use your card to pay for something that you've already included in your monthly budget: gas for your vehicle or a monthly transit pass. You can then pay off your card balance in full when you receive your bill. You don't end up spending anything extra since you were likely going to buy the gas or transit pass anyway.
- With a loan, if you get laid off, if your hours at work are reduced, if you get injured or become sick, or if your income drops and you can’t afford to make your loan payments, then your loan would be sent to collections. Your credit score would be damaged again/more and you would have more stress in your life. However, with a cash secured credit card, if you don’t use it, then you don’t have to pay anything. If your life hits some bumps in the road, your credit will continue to improve, and there won’t be any additional problems that a loan-based credit rebuilding program could cause.
In short, from our perspective, a cash secured credit card is a much better way to give your score a boost or rebuild your credit. You just need to make sure that when you use the card, you never miss your minimum monthly payment. If you do, the credit card company won’t take the payment from your security deposit. They'll charge you late payment fees and eventually just close your card if you don't make your payments on time.
You also don’t have to use the card much. You only need to use it once every few months to keep the card active. Also never use more than 50% of your limit on the card as this will negatively impact your credit score. We also recommend that you faithfully fully pay off the card every month and try to never carry a balance. If you do have a balance, keep it low and pay it off quickly.
As your financial situation gets better, you may want to think about increasing your credit limit to somewhere between $1,000 and $2,500. This may mean that you’ll need to increase your cash security deposit but having a larger credit limit like this and not using it will boost your credit score even more.
Here's a government list of most secured credit cards in Canada. Just select your province, press the "Apply" button, and then you can compare the cards. Here's another list with some cards that the government missed on their list.
If you’re scratching your head wondering where you’re going to find the money for a cash secured card or eventually increase your cash security to over $1,000, here are whole lot of ideas to help you find the money you need.
What to Watch Out for & Be Aware of with Debt Relief Programs & Solutions in Lethbridge
To make more money off of you, some credit repair companies and agencies also promote certain debt relief programs and services. If you are struggling to pay your bills and debt payments each month or have some bad debts you need to deal with, then some sort of debt relief option may be very helpful for you. Just be aware of these three things:
- Every debt relief option (there are 5 of them in Canada) has as many disadvantages as it has advantages. If they didn’t, then everyone would be signing up for one of these programs. The key is to find the debt relief option with the right advantages for you and disadvantages that you can live with. Beware of anyone who pitches a debt relief program to you and focuses too much on the positives and doesn’t spend much time making you aware of the negative aspects of the program.
- If the person trying to sell you a program earns commission off of you signing up for the program, then they may have their financial best interests at heart and not yours. The fewer options their company offers, the more often this will be true.
- In Canada, there is always more than one way to improve, restore, or fix your credit, and when you look at debt relief options, there are as many as 5 of them depending on your province: the debt management program, orderly payment of debts program, a debt settlement, a consumer proposal, and going bankrupt. So if you're left with the impression that the person or company you are working with isn’t fully exploring all of your options with you or is promoting a particular one over the others (or isn’t even saying much about the others), then you'll probably want to get a second opinion from a professional who will be more objective in discussing the advantages and disadvantages of all your options with you.
Tips to Fix, Improve or Restore Your Credit Score – Do It On Your Own for Free
Paying someone to help you rebuild or improve your credit score is not necessary. We have all of the top credit score tips that actually work right here – completely for free. Take a look. We’ll show you how you can fix your credit fast along with the most effective ways that take more time. Once you’re done with all this, we can then show you how to achieve a super high credit score. If this all seems a bit complicated, your circumstances are unique, or you’d like some personal advice and guidance, there are financial experts in your area who have experience helping people with bad debt – and their help is usually free!
Where to Get Free Individual Credit Help in Lethbridge to Fix Your Bad Credit Rating
Free Advice and Guidance from Non-Profits in Your Area
A lot of people aren't aware of this, but some of the most helpful experts on fixing bad credit situations and totally repairing credit ratings are non-profit Credit Counsellors in Lethbridge who offer free, confidential appointments (either over the phone or in person). If you have debts you are having trouble paying or are experiencing financial difficulty, they are the best people to go over your situation with you. Anything you discuss with them is completely confidential. Don’t worry if your situation is really bad. They’ve likely seen far worse, and they are non-judgmental in how they help. Follow this link to locate a non-profit credit counselling service near you.
How to Obtain Free Credit Score & Repair Help in Lethbridge from Your Credit Union, Bank, or Mortgage Broker
To find out about your credit rating, it’s worth asking the lender at your bank or credit union. Maybe you applied for a loan and were declined. Don’t be ashamed; instead, use it as a chance to find out what you can do to get your finances back under control. When a lender turns you down for a loan, line of credit, overdraft, or something else you applied for, they can tell you why. Inquire about anything that isn’t clear. Then ask them to outline what you can do to raise your credit score and credit rating. A mortgage broker can also answer these questions if you applied for a mortgage.
Get a Copy of Your Credit Report for Free
If you haven’t seen a copy of your own credit report and want to find out what it really looks like, you can get a free copy of your credit report. It doesn’t, however, include your score. For that you’ll need to pay either Equifax or TransUnion, the two credit reporting agencies in Canada (they charge between $15 and $25). If you’re okay with just an estimate of your score, you can use this tool for free. The neat thing about this online tool is that you can change your answers to the questions and see how certain factors affect your score. This type of interactive information isn’t usually available, let alone for free, and certainly not from paid credit repair agencies.
To Sum It Up - Save Your Money, Repair & Improve Your Credit Yourself
If you live in Lethbridge and are seriously considering finding a credit repair company to assist you with improving or repairing your credit, we honestly believe that you’d be much better off doing it yourself. Start by getting a copy of your credit report – the free one should do for now (if you really want to know your score or have a baseline to measure your progress from, then go ahead and pay to get your credit score). Talk to your banker or a certified credit counsellor for some guidance. Think about applying for a cash secured card if they recommend it, and follow the suggestions we’ve outlined above along with in the guidance provided on the websites we link to on this page. Repairing your credit takes time and diligence, but by using the information we give you here, you’ll save a ton of money and your credit rating will be on its way up as quickly as possible.