While living in Edmonton comes with countless benefits, but it can be quite expensive. In fact, the average person in Edmonton has over $25,000 of non-mortgage debt, which is among the highest in the country.
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While some Edmontonians can handle these high amounts of debt due to high income or lots of savings, this isn’t always the case. For many consumers, this large amount of unpaid debt can affect other areas in their lives, most notably their credit score. Having bad credit isn’t a great feeling and it may leave you feeling hopeless if you ever need to borrow more money in the future.
Thankfully, there are actually a few different borrowing options for those with bad credit.
What is Bad Credit?
Before we look at the loan options for those with bad credit in Edmonton, we need to ensure everyone understands what bad credit is. In Canada, credit scores range from 300 to 900. The higher the score, the lower the interest rates and the better loans you get access to.
While there is no concrete definition for what bad credit is, generally, most lenders believe that a score between 300-600 is bad. Of course, the numbers might be 300-560 for some lenders and 300-575 for others, but if your score is under 600 you should generally be prepared for some lenders to consider it as bad.
Click here for more information about bad credit.
Of course, a good or bad credit score can also vary from person to person. Someone who has struggled with finances all their life might see a 620 credit score as great, while someone who has been at 850 their whole adult life will see that same 620 as a bad score.
Common Causes of Bad Credit in Edmonton
So now that you know a little about what bad credit is, what causes this bad credit? Well, in general, bad credit is caused by irresponsible spending and other bad financial habits. While we all make mistakes here and there, continuous or frequent bad financial habits can quickly leave you with bad credit.
However, in addition to bad habits and overspending, things like accidents, emergencies or other unforeseen circumstances can lead to bad credit issues. These include things like unexpected travel, job loss, change in income, medical emergency, or a car accident.
Type of Loans Available to Those With Bad Credit in Edmonton
Now that you understand a bit more about bad credit and what causes it, what are the types of loans available to those with bad credit? Well, there are a few different options at your disposal.
Loans From Lenders Who Don’t Check Credit
If a lender offers loans without performing a credit check, they are a great option for those with bad credit. While these might be easier to get, they often come with decently steep interest rates and can be expensive. But if your options are limited, they are a good choice.
Looking for a loan with no credit check? Look at this first.
These are loans that are secured by some sort of asset, such as your car or home. You will put up these things as collateral for the loan, and if you default, the lender can legally take possession of the collateral. Because there is less risk involved, lenders are often willing to work with those who have bad credit as the loan amount is secured. These loans may also come with a lower interest rate. These definitely have their place, but be sure you don’t default on the loan or you could lose a lot.
Want to know how secured personal loans work? Check this out.
So while there aren’t a ton of options, you shouldn’t have a problem finding one in your area. However, always be cautious when looking for loans. Loan scams are unfortunately quite common and they often prey on those with bad credit, as their options are limited. So be sure to always know the reputation of any lender before you agree to work with them.
Credit Improvement Products
While some people might be fine with applying for and using bad credit lending options, others might not. Some people might be more comfortable with improving their credit first and then applying for a standard loan. While some people can improve their credit on their own by reducing spending and using credit intelligently, this can be easier said than done.
As a result, many consumers will need some assistance to improve their credit. Thankfully, there are a few different credit improvement products that exist that can help you improve your credit score quickly. One of the most common is a secured credit card. A secured credit requires a deposit in exchange for credit. Once you provide the credit card company with a deposit, you’ll receive a card with a specific limit. You should use your card regularly and responsibly and your creditor will report your payments to the credit bureaus, thus improving your credit score over time.
If you don’t want to use this option, you can opt to utilize a credit rehab savings program. This program is a creative way for you to build up your credit, while also being a way to save money. There are no up-front fees and you simply pay a manageable weekly payment that will be reported to the credit bureaus.
Click this link to learn a few more credit score improvement techniques.
Great Loans For Those With Bad Credit
Do you have bad credit and are looking to borrow some money? If so, look no further than Loans Canada. We can help get you set up with a great loan, even with less-than-perfect credit.