Review All of Your Options to Get the Best Credit Repair Help in Toronto

There are some companies who are selling costly credit repair services in Toronto that sadly, often leave people struggling to pay more debt than they started with. Based on how much they charge for these services, it’s likely a lot of people would expect to receive a lot more value than what they actually receive. What’s also surprising is that services like this can possibly make someone’s credit worse if they are unable to make all their payments, and their new credit repair loan is sent to collections. Although this may be unnerving, here is some good news: you can repair and improve your credit score in Toronto for free – and even get more one-on-one help and better advice than a good number of credit fixing companies provide. Keep on reading, and we’ll tell you how to get this.

Credit Repair Services, Companies & Agencies – There are Cheaper Options to Fix or Improve Bad Credit

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

In Toronto, 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 four advantages of a cash secured credit card versus a credit rebuilding loan:

1. 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.
2. 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.
3. 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.
4. 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 finances improve, you may also want to consider increasing your credit limit to between $1,000 and $2,500. This may require a larger cash security deposit from you, but having more credit available to you and not using it will increase your credit score even more.

Here is a government list of a bunch of secured credit cards. Just select your province and then you can compare the cards. Here is another list with a few more cards that aren't included on the government's list.

If you’re wondering where you’re going to get the money for the cash security on a card, here are a whole bunch of ideas of places where you could possibly find the money.

What You Need to Watch Out For with Debt Relief Programs & Solutions in Toronto

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

1. There are advantages and disadvantages with all debt relief solutions. If there weren’t, everyone would try to sign up for one. What you need to do is weigh the pros and cons for each option and see what will be best for you to live with in the long run. Also, as someone tells you about a debt relief program, watch out if they spend way too much time talking about its positive aspects. If they don’t take almost as much time to tell you about the negatives, move on and find someone who’s more objective and not trying to sell you something.
2. If the company representative attempting to sell you a program is on commission, or gets a kick back from you signing an agreement or being referred to another business, they could be focusing more on their own financial interests rather than on what’s best for you. This is often true of businesses that only have a few options to offer you.
3. 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.

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 Individual Credit Help in Toronto 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 Toronto. 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 Toronto 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.

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.

Save Money & Do It Yourself - Repair, Fix or Improve Your Credit on Your Own

If you live in Toronto 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.