Tempted by a Credit Repair Company in Winnipeg? How to Do Better for Free

A number of companies who provide credit repair in Winnipeg 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 Winnipeg – 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.

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.

Why to Use a Cash Secured Credit Card to Fix, Improve or Restore Your Credit Score

In Winnipeg, 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.

Cash secured credit cards have a number of advantages over credit rebuilding loans. Here are four of the biggest:

1. As a revolving type of credit, a cash secured card will improve your score faster than a loan as long as you don’t carry balance equal to half of your credit limit or greater.
2. Most credit repair loans have fees and interest that you pay monthly with your payment. A secured credit card only has one yearly fee, and you don’t have to pay any interest if you pay off what you owe every month in full.
3. It’s far more affordable because you don’t have to fit a credit repair company service fee and/or monthly loan payment into your budget. Instead, you simply use your card to pay for something that's already included in your budget – something like gas for your vehicle or a transit pass. You then completely pay off the card balance when you receive the bill. This doesn’t end up costing you anything extra since you were planning to purchase the gas or transit pass anyway.
4. With a loan, if you get injured or become sick, if your hours at work are reduced, if you get laid off, or if your income drops and you can no longer manage to pay your monthly loan payments, then your loan would likely be sent to collections. Your credit score would again be damaged, and you'd probably experience more stress in your life. With a cash secured credit card, on the other hand, if you don’t choose to buy anything with it, then you don’t have to make a monthly payment. Even if your life hits a bumpy patch of road, your credit should still continue to grow stronger, and you shouldn't experience any of the problems that a credit rebuilding loan would likely cause.

In short, a cash secured credit card is a far better way to rebuild your credit or give your score a boost. Just make sure that when you use it, you always make at least your minimum monthly payments. If you miss a payment, the credit card company won’t take the monthly payment from your cash secured balance. You will still need to make it and not making the payment will hurt your credit. If you miss a number of payments, the credit card company will close your card and give you your cash security back after deducting any money you owe them.

Another great advantage of a cash secured credit card is that you don’t have to use it much. All you need to do is use it once every few months or so to keep the card active and never use more than 50% of your credit limit (doing this will negatively impact your credit). We would also recommend that you always pay off the card balance in full every month and never carry a balance.

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 You Need to Watch Out For

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 Winnipeg might be best for you, here are three things to be aware of:

1. 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.
2. 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.
3. 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 Personal Credit Assistance in Winnipeg to Fix Your Bad Credit Rating

Free Guidance & Information from Non-Profit Agencies Near You

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 Winnipeg. 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 Get Free Credit Score Repair Help in Winnipeg from Your Bank or Credit Union

The lender at your financial institution, or the mortgage broker if you applied for a mortgage, is a good person to talk to about your credit rating. You might have been declined for a loan. Instead of being embarrassed, use it as an opportunity to figure out how you can best get your financial situation back on track. If you get declined for something you’ve applied for, e.g. a loan, line of credit, or mortgage, the lender is allowed to tell you why. And if the explanation doesn’t make sense, get them to explain it again. Finally, ask them what you should do to get a better credit score and overall credit rating so that you’re not declined next time.

How to Get a Free Copy of Your Credit Report

If you have never seen your credit report and are curious to find out how bad things really are, you can obtain a free copy of your credit report by following these steps. To get your credit score, you’ll have to pay a fee of about $15 - $30 to either Equifax or TransUnion, the two credit reporting agencies in Canada. This tool can estimate your credit score for free. This tool also lets you adjust your answers to the questions they ask, giving you an idea of how changing certain things can increase your score. This kind of specific feedback is hard to get anywhere else, and certainly not from paid credit repair companies, if you can find it at all – and it’s available to you for free.

To Sum It Up - Save Your Money, Repair & Improve Your Credit Yourself

So if you live in Canada and are seriously thinking about finding a credit repair company to help you repair or improve your credit, we think you’d be far better off doing it yourself. Get a free copy of your credit report (and your score if that’s important to you right now). Speak with your banker or a credit counsellor for guidance. Consider getting a cash secured credit card if your banker or credit counsellor recommends it. And follow the suggestions we’ve laid out here as well as the guidance provided in the resources we link to from this page. Credit repair ultimately takes time and patience, but by taking advantage of the resources we point out here, your credit should be re-established and improved as quickly as is possible and you’ll save a lot of money in the process.