Review All of Your Options to Get the Best Credit Repair Help in Windsor
A number of companies who provide credit repair in Windsor 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 Windsor – 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
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, 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.
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
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:
- 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.
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 Windsor 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 Windsor 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 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
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.