Tempted by a Credit Repair Company in Victoria? How to Do Better for Free
Some credit repair companies in Victoria 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 Victoria 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
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.
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.
The Fastest & Cheapest Way to Fix, Improve, or Restore Your Credit Score in Victoria - Use a Cash Secured Credit Card
The faster and better way to fix, improve, or restore your credit score, compared to a credit rebuilding loan, is by getting a cash secured credit card. The way they work is you put down as much money as you would like your credit limit to be. Some cards require as little as $250 or $400 to get you started. They then function as 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.
The bottom line, from our perspective, is that a cash secured credit card is a much better way of giving your credit score a boost and rebuilding your credit. The thing to remember with a cash secured credit card is that you always need to make at least your minimum monthly payment. If you miss a few months of payments, the credit card company will take money from your deposit, pay off what you owe, return any money left over, and then cancel the account. This will show up negatively on your credit report.
Most people think that you have to use a credit card a lot for it to help your rating. That’s not true. It’s okay to use it once every few months for a purchase that doesn’t use more than 50% of your credit limit. Then when the bill comes – and it’s important to wait for it – you pay it off in full.
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 Victoria
Some credit repair agencies will try to promote specific debt relief services and programs to you. Credit repair companies want to earn money, and while there’s technically nothing wrong with a company wanting to earn as much as possible, how they go about doing this is important. If you have bad debts you’re having difficulty paying, a debt relief option might be a good solution for you. So to help you figure out what debt solution in Victoria might be best for you, here are three things to be aware of:
- 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.
- 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.
How to Fix, Improve or Restore Your Credit Score 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 One-On-One Credit Help Anywhere in Canada to Fix Your Credit Rating
Free Help and Guidance from Local Non-Profits
One of Canada’s best kept secrets is that some of the most helpful experts for fixing bad credit and completely repairing credit ratings are non-profit Credit Counsellors in Victoria. They offer no cost, confidential appointments (either in-person or over the phone). If you’re having money trouble or difficulty paying your bills and debts, they are the best people to give you guidance and information about how to get back on track. Whatever you talk to them about is absolutely confidential. Don’t be embarrassed if you think your circumstances are awful. They won’t judge you. They’ve probably seen much worse. Click here to find a local non-profit credit counselling agency in your area.
How to Get Free Credit Repair Advice from Your Bank or Credit Union
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.
How to 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.
Save Your Money, Fix or Do Your Credit Repair Yourself – That’s What it Comes Down To
If you are in Victoria and really are planning to find a credit repair service to help you improve or repair your credit, we truly believe that you would come out ahead if you do it yourself. To begin with, get a free copy of your credit report (only order your score if you really need it because it changes often). Then speak with your banker or a credit counsellor for information and advice. Seriously consider applying for a cash secured credit card if they believe it would help your situation. Finally, follow the suggestions we explain above, as well as what is in the information provided in the resources we link to. Fixing your credit takes time and care to do the right things. Work through what we explain above; not only will you save a lot of money, your credit rating should be rebuilt as quickly as possible.