Bad Credit Loans Nova Scotia
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Written by Bryan Daly
Best Bad Credit Loans Nova Scotia 2020
Bad credit is something that many Nova Scotia citizens will have to deal with at some point. The problem with bad credit is that it can be difficult to fix once it gets past a certain point. During that time, it can cause damage to your finances and decrease your chances of being approved for reasonably priced credit products in Nova Scotia.
However, if you’re willing to make an effort and be patient, there’s always the possibility of fixing and improving your credit in Nova Scotia. If you’re having trouble getting approved, securing yourself a bad credit loan might be a way for you to correct your financial issues.
For more information about loans in Nova Scotia, click here.
How Did My Credit Get So Bad?
Depending on how you’ve been handling your finances, it can be difficult to pinpoint the exact cause of bad credit. In fact, it might be due to any number of issues, such as:
A History of Defaulted Payments
Whenever you have an active credit product, be it a credit card or a personal loan, it’s always important to pay your bills on time and in full. Every time you default, meaning you don’t adhere to your loan agreement in some way, the incident gets recorded in your credit report and causes your credit score to drop. Click here to see how your payment history affects your credit score.
A High Credit Utilization Ratio
Revolving credit products (credit cards, lines of credit, etc.) are more frequently used amongst consumers, as they’re relatively easy to acquire. Every revolving credit comes with a credit limit, which you can dip into as needed, then pay back in whatever amounts you desire (as long as you make at least the designated minimum payment). To get an idea of how much debt you’re carrying, you can calculate your “credit utilization ratio” (total debt/credit limit x 100). It’s better for your credit score if you manage to keep your ratio at around 30-40% maximum. The closer you are to reaching your credit limit, the worse it could be for your credit score.
While some borrowers in Nova Scotia simply have spending problems causing them to max out their credit credits with consumer goods and damage their credit, others might be just suffering from some emergency situation, financial or otherwise. When these types of emergencies come about, not only is it easy to spend every penny you have trying to fix the situation, but they can make you forget to pay your bills on time. To learn about emergency installment loans, look here.
Loss of Employment
One of the leading causes of bad credit and financial problems in Nova Scotia is, of course, loss of employment. Whatever the reason might have been, when you’re not earning an income, it’s obviously harder to make your payments on time and in full. You start to rely on your credit products just to get by, they have no money to back them up, ultimately damaging your credit until you manage to find another source of employment.
Take a look at how bad credit can affect your daily life.
How Will Bad Credit Affect My Finances?
Here’s a basic timeline to show you how bad credit can damage your financial health:
- Generally speaking, a credit score of 650-900 is where you want to be for the best approval results and the lowest interest rates.
- However, because of a series of defaulted payments (or any of the above situations), your credit score dips below that point.
- When you apply for a new credit product, there’s a possibility that your lender in Nova Scotia will make a “hard inquiry” into your credit to see how strong of a credit user you are.
- They’ll then see your bad score and poor payment history, decide you are a borrowing risk, then either deny your application or give you a high-interest rate when you’re approved, both of which can be terrible for your finances.
- Your bad credit now prevents you from getting approved, so you start applying all over town. Every hard inquiry drops your credit score by several points and gets recorded in your credit report. More lenders see your bad credit profile and decide you’re not worth the risk.
For a better look at credit score ranges, read this.
Will All Lenders Deny My Applications if I Have Bad Credit?
If your credit does look a bit worse for wear (credit score under 600), you may have trouble getting your applications approved by banks and other conventional lenders in Nova Scotia. Don’t worry, there are plenty of alternative and online lenders in Nova Scotia whose clientele is primarily made up of bad credit borrowers. Many of these lenders in Nova Scotia don’t even check your credit, as long as they can confirm that your income is steady enough to pay back your loan on schedule.
Even with bad credit, you can still gain access to:
- Credit rehabilitation savings programs in Nova Scotia
- Personal/installment loans (with no credit check)
- Loans secured with collateral (when you offer assets, such as your home or car)
- Secured credit cards
Just be aware that:
- Some of these products come with higher interest rates because of the risk the lender is taking (only apply for a loan you can 100% afford)
- You may need a less risky borrower to co-sign your application (especially if you don’t have any collateral to offer)
- If you default, your cosigner will be responsible for your unpaid loan balance
- If you and your cosigner default, both of your credit profiles will be damaged
It’s always in your best interest to be informed about your credit score, check this out.
Do All Bad Credit Lenders in Nova Scotia Ask For Advanced Deposits?
Absolutely not! While there are legitimate lenders in Nova Scotia who cater to bad credit borrowers, there are some predatory, even fake organizations out there trying to take advantage of people who don’t know any better. Desperate to resolve their bad credit situation, borrowers in Nova Scotia sometimes give out their personal and banking information. They then fall victim to predatory fees, fraud, and identity theft.
To spot a predatory or fake lender:
- Look out for advanced deposits – As we said, no lender should ask for a deposit or payment of any kind before your loan is approved and received. Demanding an advanced payment (which scam artists will call “loan insurance” to fool you) is illegal in Canada.
- Do a lot of research – If they’re a legitimate organization, your lender in Nova Scotia should have a good reputation online and through word-of-mouth. Check customer reviews, ask the people you know and always look up their company name in the Better Business Bureau database.
- Read the fine print – Especially when it comes to payday loans, always read your contracts properly and be wary of any advertisements or the way a salesperson acts. Legitimate lenders in Nova Scotia should tell you precisely how much your loan will cost overall, with interest and fees, by the end of your loan term. If your contract doesn’t contain such details or your sales representative is clearly dodging your questions, they may be trying to scam you.
Want to know how to identify a loan scam? Watch this video.
Are There Ways of Improving My Bad Credit?
While it will take a lot of work on your part, it’s totally possible to improve your credit with some of these simple solutions:
- Paying your bills on time and in the fullest amounts possible
- Pay down whatever debt you already have prior to applying for new credit
- Negotiating with your lender for an extended payment term if necessary
- Getting a secured credit card (if you don’t qualify for a regular one)
Can Loans Canada Help Me Get a Bad Credit Loan?
Of course! At Loans Canada, we can get any Nova Scotia consumer connected with the right sources of credit products for all financial needs. Whether your credit is good or bad, our team can help you. Simply apply below and you’ll be on the fast track to a better financial future!