Review All of Your Options to Get the Best Credit Repair Help in BC
Some credit repair companies in BC 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 BC 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.
Credit Repair Services, Companies & Agencies – There are Cheaper Options to Fix or Improve Bad Credit
Credit repair services aim to assist people in improving their credit score. In Canada, the main way they do this is by granting credit building loans for a fee. The logic behind this is that a new loan will put positive information on someone’s credit report, demonstrating to the credit scoring system that this person can use credit wisely.
This approach undoubtedly helps a fair number of people improve their score, but we think that it comes at much too steep a cost for many consumers. A credit building loan ensures that a company can charge someone interest and fees every month over many years. But there is a better, cheaper, and more effective option.
Advantages of a Cash Secured Credit Card Versus Credit Building Loan to Improve, Restore or Fix Your Score
In BC, a cash secured credit card can be a much better and faster way to fix, improve, or restore your credit score compared to a credit rebuilding loan. A cash secured card requires you to put up some money as security for the credit card. The cash security required can be as little as $200 or $300. This credit card then functions as a completely normal credit card.
Here are the advantages of a cash secured credit card compared to a credit rebuilding loan:
- The cash secured credit card can provide a much quicker and greater boost to your credit than a loan.
- It is far cheaper than most credit repair loans because it only has one annual fee, and you don’t have to pay any interest costs or fees if you pay off your balance in full every month.
- It’s way more affordable because you don’t have to make room in your budget for a monthly loan payment and/or a credit repair company service fee. Instead you just use your card to pay for something that is already in your budget – like gas or your transit pass – and then pay off the card balance in full at the end of the month. This doesn’t cost you anything extra if you were going to buy the gas or transit pass anyway.
- If your income drops and you can’t afford to make your loan payments, your loan would be sent to collections, your credit score would be further damaged, and you would have more stress in your life. With a cash secured credit card, if you don’t use it, then you don’t have to pay anything. If you get laid off, you work less hours, you get injured or you become sick, your credit won’t be impacted right away, and there won’t be any additional problems that missing loan payments 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.
The credit limit on your secured card should be something reasonable that you can afford. If your income is very low, a limit of a few hundred dollars can work. However, if you can afford it, a higher limit of $1,000 to $2,500, will probably help you move your credit score up faster and higher.
Here is a government list with a lot of secured credit cards in Canada. To narrow down the list, choose your province, press the "Apply" button, and compare the cards. Here are some more cards that were missed on the government list.
If you are trying to figure out where you’re going to find the money for a cash secured card, here are some great ideas of where you can possibly get some.
What to Watch Out for & Be Aware of with Debt Relief Programs & Solutions in BC
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 are 5 basic ways to fix, improve, or restore your credit: a debt management program, an orderly payment of debts program, a debt settlement, a consumer proposal, and filing for bankruptcy. Anyone you talk to about getting help with your debts should be explaining all of these options, and what the pros and cons of each would be for you. If you get the feeling that whoever you’re talking to is pushing one particular option on you, it would likely be best to get a second opinion from someone more objective.
Tips to Fix, Improve or Restore Your Credit Score – Do It On Your Own for Free
It's not necessary to pay anyone on a regular basis just to help you restore or improve your credit score. We have all of the best credit score tips that really work right here – for free. Check them out. We’ll show you how you can repair your credit as quickly as possible along with the most effective methods that take a bit more time. In addition to this, we can also show you what's needed to get an amazingly high credit score. If all of this seems a bit much for you, if you have a complicated situation, or if you’d like some individual help and guidance, there are financial experts located close by you who have expertise in assisting people with bad debt – and they’ll usually help you for free!
Where to Get Free Individual Credit Help in BC to Fix Your Bad Credit Rating
Free Advice and Guidance from Non-Profits in Your Area
A lot of people don’t know this, but some of Canada’s most helpful experts on fixing bad credit situations and completely repairing credit ratings are non-profit Credit Counsellors who offer free appointments (either over the phone or in person) in communities across Canada - including BC. If you have debts you are struggling to pay or are struggling in some way with your finances, they are the best people to sit down with and go over your financial situation. Anything you discuss with them is completely confidential, and don’t worry if your situation is really bad. They’ve likely seen far worse. They're not going to make you feel bad or judge you. They are simply there to help people. Click here to find a local non-profit credit counselling service near you.
How to Obtain Free Credit Score & Repair Help in BC from Your Credit Union, Bank, or Mortgage Broker
The lender at your bank or credit union is a good person to ask about your credit rating. You might have applied for a loan and been turned down. Don’t be embarrassed, but use it as an opportunity to learn what you can do to get your finances back on track. When a lender declines you for a loan, line of credit, overdraft, or something else you applied for, they can tell you why. Ask them to explain anything you don’t understand. Then ask them what you can do, very specifically, to improve your credit score and credit rating. If you’ve applied for a mortgage, ask your mortgage broker these same questions.
How to Get a Free Copy of Your Credit Report
If you haven’t yet seen a copy of your credit report and are wondering how bad things really are, you can follow these steps to get a free copy of your credit report. If you want to know what your credit score is, you'll have to pay for that, but either Equifax or TransUnion, the two credit reporting agencies in Canada, would be happy to sell you that information (for $24 and $17). You can also use this tool to estimate your credit score for free. The added value of this tool is that you can play with the questions they ask to get an idea of how changing certain things can improve your credit score. You’re unlikely to get this kind of specific feedback from anywhere else – not even from paid credit repair agencies – and it’s available to you for free.
Save Money & Do It Yourself - Repair, Fix or Improve Your Credit on Your Own
If you live in BC 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.