Canada is full of areas with relatively high incomes, but few are higher than Victoria. The income levels are in the top 10 in all of Canada and show no signs of slowing down. However, despite incomes being quite high in Victoria, the area is among the most expensive in the country in terms of cost of living (especially in the rent department).
As a result, the high cost of living can often lead to the residents of Victoria struggling with their debt load. Unfortunately, high levels of debt can often lead to troubles with bad credit. Getting new loans when you have bad credit can often be an uphill battle and can be costly. Thankfully, bad credit loans exist and they can be a lifesaver for those who find themselves in these difficult situations.
What is Bad Credit?
Before looking at the types of loans available to those with bad credit, it’s important to first understand what bad credit is. In Canada, credit scores range from 300-900, with the higher numbers representing better credit. When it comes to what is considered bad credit, there is no one exact number. Some lenders will have different rules about what they consider bad, but generally, any score under 600 is considered bad by most lenders and financial institutions.
Of course, bad credit for one person might not be bad for another, it’s all relative. For example, someone used to having a score of 800 will think a 600 is bad, while someone struggling to get by with a 400, would be ecstatic to have a 600 credit score.
Wondering if you can get a loan with a credit score of 450? Find out here.
So how do people find themselves with bad credit in Canada? Well generally, it is as a result of some financial mistakes like overspending, missing loan payments or simply borrowing more than they can afford. However, this is not always the case as emergencies like injuries or job loss can often lead to credit problems.
Types of Loans Available to Those With Bad Credit
So now that you know a little about what bad credit is and means, we can take a closer looks at the types of loans available to those with bad credit. In general, there are a few different types of loans available to those with bad credit. These include:
- Loans from lenders that do not check credit scores. While these are easier to get, they will often come with a higher interest rate.
- Secured loans. Because you put up collateral for this type of loan, you are immediately deemed less risky, even though your credit is bad.
- Loans in which you use a co-signer. Having someone else on the hook for the loan with you can often instill some more confidence in lenders.
While this is not a completely exhaustive list, you can see that there are some solid borrowing options for those with bad credit. However, it is also important to be wary of potential loan scams. These scams will often prey on those with bad credit as they have fewer options than the standard borrower. While some of these loan scams can be realistic, it is best to be cautious. Never provide upfront fees and no lender can guaranteed approval, so be careful when shopping for loans.
Credit Improvement Products Available in Victoria
While there are borrowing options for those with bad credit, the loans often won’t be of the highest quality. As a result, instead of going with one of the aforementioned options, you might want to improve your credit first. Improving your credit before applying for a loan can be a great way to increase the odds of being approved for a better and more affordable loan.
While some people are comfortable working to improve their credit scores by themselves, others respond better when they seek out the help of a professional. Thankfully, these people are in luck as there are several different credit improvement products available in Victoria and the rest of Canada, such as:
- Secured Credit Card – A credit card in which you must first provide a deposit. Your limit is often low, but this means you can still build credit while not overspend.
- Installment loan – A loan itself can actually be a great way to build credit. Of course, be sure it is a loan that you can afford to pay back on time and in full.
- Credit Rehab Savings Program – A unique and helpful program that allows you to not only save money but also build up your credit. It features low weekly fees and everyone is accepted, even if you have no or bad credit.
Trying to buy a house with bad credit? Be sure to check this out.
Quality Bad Credit Loans From Loans Canada
Have bad credit and need a loan in Victoria? If so, be sure to reach out to Loans Canada. We will be able to work closely with you to find a suitable lender and loan in your local area.