Review All of Your Options to Get the Best Credit Repair Help in Kelowna
A number of companies who provide credit repair in Kelowna are trying to sell really expensive services that unfortunately often saddle people with more debt. They don’t provide as much value as a lot of people would expect for the price they are paying. And they possibly put someone in jeopardy of having worse credit by sending their new credit repair loan to collections if they are not able to make all their payments. While this may be unsettling, here is some good news: you can improve and repair your credit score for free in Kelowna – and even receive better advice and more one-on-one help than most of credit fixing companies offer. Keep on reading and we’ll show you how.
How to Fix & Repair Bad Credit for Less Than Credit Repair Companies, Services, & Agencies
The goal of credit repair companies and services is to help people improve their credit score – often claiming to be able to improve it quickly. The way many of them appear to do this in Canada is by offering credit building loans. The idea is that this loan will create some new good credit on your credit report and show the credit scoring system that credit is available to you and that you are using it responsibly.
While this approach no doubt helps a fair number of people improve their credit score, in our opinion, these companies don’t offer it because it’s the best way to fix or repair bad credit. They offer the loan because it's the most lucrative for them. A credit building loan ensures they can charge you interest and fees over several years. But you need to know something: there is a better, cheaper, and more effective way to improve your credit.
Why to Use a Cash Secured Credit Card to Fix, Improve or Restore Your Credit 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 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.
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 You Need to Watch Out For with Debt Relief Programs & Solutions in Kelowna
Various credit repair companies and agencies, in an effort to make more money from you, also promote certain debt relief programs and services. If you are having trouble paying your bills and making debt payments each month, or if you have some bad debts you need to take care of, then some sort of debt relief option may be a good idea for you. Just be conscious of these three things when looking at debt solutions in Kelowna:
- All debt relief options have just as many disadvantages as they have advantages. If there wasn't some sort of down side, then everyone would be enrolling in one of these. If you're looking for a debt relief option, the key is to find one with the right advantages for your situation and disadvantages that you can live with. Watch out for anyone promoting a debt relief program who focuses too much on the positive aspects of their program and doesn’t fully inform you of the negative consequences of their program.
- If the employee trying to sell you a program earns commissions or receives a financial benefit from you signing up for it, then they may be putting their own financial interests ahead of yours. The fewer options a company offers, the more often this will be true.
- There is always more than one way to fix, improve, or restore your credit, and when it comes to debt relief options, there are five of them in Canada (debt management program, orderly payment of debts program, debt settlement, consumer proposal, and bankruptcy). So if you get the sense that the person or company you are dealing with isn’t exploring all your options with you or is favoring one over the others (or isn’t even mentioning the others), then you may want to look for a second opinion with someone who will more objectively discuss the pros and cons of all your options with you.
Tips to Fix, Improve or Restore Your Credit Score – Do It On Your Own for Free
You don’t need to pay anyone on a weekly, bi-weekly, or monthly basis to help you improve or restore your credit score. We have all of the essential credit score tips that work right here – for free. Take a look. We’ll show you the ways you can fix your credit quickly along with the most effective methods which do, however, take more time. After you’ve done all this, we can then show you how to get an extremely high credit score. If all this isn’t enough for you, if your situation is complex, or if you’d like some specific help and guidance, there are financial experts near you who have expertise in helping people with bad debt – and they’ll typically help you for free!
Where to Get Free Personal Credit Assistance in Kelowna to Fix Your Bad Credit Rating
Free Guidance & Information from Non-Profit Agencies Near You
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 Kelowna 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 Get Free Credit Repair Advice from Your Bank or Credit Union
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 Copy of Your Credit Report for Free
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.
To Sum It Up - Save Your Money, Repair & Improve Your Credit Yourself
If you live in Kelowna 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.