As soon as you have a bad credit score, it can be challenging to get a car loan, lease, mortgage, etc. Therefore, it's vital to get a good credit score, however, if you have bad credit, rebuilding is difficult, but not impossible, thanks to many Canadian credit card companies that offer excellent cards for people with limited credit or low scores.
How Do I Resolve Or Fix Bad Credit Score?
Using a credit card correctly is the best way to get proper credit and rebuild bad credit. After all, 35% of your creditworthiness is due to your payment history. Another 30% of your credit rating is calculated based on the use of the loan, if you get less credit, your score is better. New credit cards increase the credit limit and therefore reduce the use of credit.
Difference Between Guaranteed Credit Cards And Secured Credit Cards
Unlike the credit cards that you can get with a good credit score, these are relatively simple cards. And that's fine because the goal is to use them to build your loan, prove that you're financially responsible, and then look for a better option to access capital.
And again, you should know that there are secured and unsecured bad credit cards. The difference is that secured credit cards require a deposit that protects the card issuer if you don't pay your debts. Because of this, it is easier to get a secured credit card. On the other hand, unsecured credit cards do not require a deposit, but generally have high-interest rates and low credit limits.
Many people with bad credit cannot sign up for a regular credit card, but they can choose a guaranteed or secured credit card.
To activate a secured card, you need a deposit, which in most cases, corresponds to the credit limit. Deposits start at around 200 USD and go up to 1000USD or more. The deposited amount will be refunded as soon as you have paid your credit and closed your credit card.
Unless you can get anything else, you are almost always approved for a secured credit card. Many companies offer a questionnaire to determine if you qualify before having to go through a problematic investigation to get your credit score.
The Best Credit Cards To Truly Fix Bad Credit
1. BMO Secured Credit Card
This BMC MasterCard has a deposit of 100 USD to 10,000 USD that matches your available balance. The card application takes only a few minutes and can be done online, while the annual fee is only 6.95 USD without any interest on the purchase price.
2. Home Trust Secured Credit Card
With this credit card, you can deposit between 500 USD and 10,000 USD, which corresponds to your credit line. However, you can increase this by making additional deposits. The annual interest rate is 19.99%, without a yearly fee or 14.9%, with a fee of 59 USD per year.
3. Refresh Financial Guaranteed Credit Card
To receive a secured credit card from Refresh Financial, you need a Canadian ID, a minimum monthly income, and an open bank account, but do not request a credit check before approval. The credit limit depends on the amount of the deposit and can vary between 200 USD and 10,000 USD. The annual interest is 17.99%, and the annual fee is 12.95 USD.
4. Capital One Guaranteed Credit Card
To receive a guaranteed credit card from Capital One, you must meet the following conditions:
- Be of legal age in your area or province
- You are not currently a capital one cardholder
- I haven't had a bad account in the last year
- You haven't requested a capital one card more than once in the past month
Capital One offers an unsecured or secured card based on creditworthiness and credit limits in the range of 300 USD to 7,000 USD, with an annual percentage of 19.8% and 59 USD in yearly fees.
Conclusion
Now you know that you can qualify for some credit cards, even if you have low credit! When used properly, these cards can help you rebuild your credit and increase your credit score. You can as well fix your previous credit mistakes and create a better financial future for your business.