Your credit rating is an assessment of your creditworthiness as a borrower. The higher your rating, the more confident lenders are that you will be able to pay back your debts on time. Those who have a poor or limited credit history can run into many obstacles as it may prevent them from achieving their financial goals such as obtaining a car loan, mortgage, or even job offers in certain industries. Even if approved, those with bad credit will likely have to pay a higher interest rate or be susceptible to unfavourable loan conditions.
The cost of repairing credit depends on the option you go with; it costs nothing except for time if you review your own credit file. On the other hand, credit repair software can range from $25 to $500 and hiring a licenced credit repair professional can cost up to $100 initially with monthly payments of $30 to $150. Let’s take a look at some of the more popular credit repair and credit building services in Canada below.
| Service | Details | |
| Climb – Accelerator Plan | -Secured savings loan that is released to you at the end of the term -Payments reported to credit bureaus -Setup fee of $150 to $250 -An interest rate of 8.99% | More Info |
| Spring Financial – Spring Savings Loan | -Loan amount placed in trust until it is paid off -Payments reported to credit bureaus -Eligible for $2,500 unsecured loan at 29.8% APR after 18 on-time, full payments | More Info |
| Refresh Financial – Credit Builder Program | -Loan held in secure trust and paid off in installments -Payments reported to credit bureaus | More Info |
MyMarble | -Product that allows for subscription payments and displays credit impact of your actions -Payments reported to credit bureaus -Monthly subscription ranges from $9.99 to $29.99 | More Info |
Credit repair can help you achieve your financial goals. For those looking to repair their credit, there are several options available to them, as listed below.
You can request a free credit report from TransUnion and Equifax then review your own file for any errors. This option can take time and patience as you’re likely unfamiliar with the process and will need to contact various creditors, lenders, and even the credit bureaus.
There are a number of software solutions that can help you repair your credit, ranging from basic to advanced. Basic software will provide you with directions on how to dispute errors found on your report and a template for a dispute letter to be sent to the credit bureaus. Advanced software is more expensive, but they have a wider range of dispute letters for different errors and can provide alerts notifying you of the progress of your dispute. Additionally, they allow you to track your credit score.
Check out what credit score you need to reach the “good” credit score range.
Hiring a licenced credit repair attorney to identify and make disputes on your behalf can save you a lot of time. Also, a credit repair professional can coach you on credit management to prevent future issues. However, this tends to be the most expensive alternative as these services will typically involve both a setup fee and a recurring payment.
Before deciding which credit repair service to work with, consider the following:
Credit repair can remove negative marks (if it is a legitimate error) from your credit history and ensure that your credit report is accurate. Items that may be corrected include:
Note: One thing to note is that credit repair only removes items that should not be there. All derogatory marks that are accurate, timely and verifiable cannot be removed.
Credit repair can save you hundreds if not thousands of dollars depending on the loan product. Credit repair indirectly saves you money. By helping you build credit, you’ll be more likely to qualify for lower interest rates which will lead to savings. Here’s a table showing how much your loan can cost at different credit ranges.
In this example, we used a $5,000 loan paid monthly with a two-year term to illustrate how credit scores can affect the total cost.
| Estimated Interest Rate Based On Credit Score | Total Interest Based On Lowest Estimated Rate | Total Interest Based On Highest Estimated Rate | |
| Poor Credit Score (300 - 559) | 18% to 46.96% | $11,981.78 | $15,601.48 |
| Fair Credit Score (560 - 659) | 15% to 35% | $11,636.80 | $14,044.47 |
| Good Credit Score (660 - 724) | 5% to 29.99% | $10,529.13 | $13,417.84 |
| Very Good Score (725 - 759) | 3% to 17% | $10,315.49 | $11,866.14 |
| Excellent Credit Score (760 - 900) | 1.5% to 10% | $10,157.00 | $11,074.78 |
When evaluating different credit repair services, you should be wary of false promises or claims made by companies that they can remove any or all derogatory items from your credit report. It is important to remember that only negative items that are on your credit report in error can be removed. It is impossible to remove any items that are accurate, timely, and verifiable.
Knowing your rights and how credit repairers operate are crucial in this process. Let’s take a look at a few regulations set out by the Ministry of Government and Consumer Services:
If a credit repair is too costly or you simply want to take control of your credit and finances yourself, there are many ways to help you get started. Here are some things you can do to help you repair your credit:
Whether you should pay for credit repair depends on your knowledge of consumer credit and the time that you are willing to commit to the process. Keep in mind that with time and patience you can do anything that a paid software or service can do. If you are willing to pay for software or hire a professional to save you time and energy in the credit repair process, be sure to do your due diligence and verify that they are compliant with the rules and regulations of your province or territory.
Rating of 5/5 based on 1 vote.
Veronica is a writer who specializes in creating unique and educational personal finance content. She has extensive experience writing blog posts for companies in the financial sector. Veronica's background is in accounting as she graduated from Western University in 2017 with a degree in accounting. She is passionate about using her accounting expertise to help others with their personal finance questions and issues and enjoys using her writing to educate Canadian readers. When Veronica is not writing, she enjoys film, reading, travelling, going to the gym, and listening to music.
Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.
Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
Frank Mortgage is Canada’s one-stop shop for mortgages. Get up to $1,500 cash back on your mortgage.
Great unsecured credit card for customers currently in, or recently discharged from, a consumer proposal or bankruptcy
Earn an average 5%¹ cashback at thousands of partners and at least 0.5%² cashback guaranteed with Neo.
KOHO’s Credit Building Program helps you build a better credit history with easy to manage payments for just $10/month.
All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.
When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website.
Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Nothing on this website constitutes professional and/or financial advice.
