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Taking out loans is something most of us will need to do at some point in our lives. If you have high credit scores, securing a personal loan is often not a problem at all. Unfortunately, things can happen that can lower our credit scores. Whether it’s missed payments, carrying too much debt, or anything else in between.

If you have low credit scores, you might be wondering if it eliminates you from being able to get a loan in Canada. Thankfully, it doesn’t. There are bad credit loans that are accessible to all and some loans that don’t even require a credit check. So, what are these loans and how do you get them?  This article will answer that question and many more as we take a closer look at how to get a loan with low credit scores.

What Is A Bad Credit Loan?

As you can likely guess, a bad credit loan is a loan that is accessible to those who have bad credit. The term itself is poor credit and it is subjective. A poor credit score ranges anywhere from under 300 up to about 559.

Credit scores between 560 and 659 are considered fair, 660  to 724 are good, 725 to 759 are very good and anything above 760 is considered excellent.

Canadian credit score ranges

The Effects Of Bad Credit

Generally, bad credit can make it more difficult to get standard loans from banks or other more traditional lenders, as they will generally use your credit scores and credit report as one of the biggest indicators of your creditworthiness. So if your credit scores are low, they might not consider you. 

However, there are many alternative lenders for people with low credit scores to choose from. While it’s easy to get approved with these lenders, they often charge high-interest rates and fees which can make the loan very expensive. 

What Are The Different Types Of Bad Credit Loans?

There are many different types of bad credit loans in Canada, including the following: 

Personal Loans

Many lenders will offer standard personal loans to those who have bad credit. While it may not be possible to do with a big bank, many personal loan lenders offer up to $35,000 or more. Interest rates on these types of loans are often higher, ranging on average from 3% to 46.97%. Legally, no lender can charge you more than 60% annually. 

Secured Loans

Another option you can choose is a secured loan. These will often have lower rates, but you will need to put some form of security, typically your home, a piece of property, or your vehicle as collateral. However, these are quite risky as you could potentially lose your home or vehicle or if you default on your loan.

Guarantor Loans

If you don’t have any collateral to offer, but you’d still like to avoid the high-interest rates that come with an unsecured loan, you can also apply for a guarantor loan. Here, your credit would not typically be a factor. Instead, you’ll need to seek the help of a co-signer, someone with better credit and healthier finances, and who would willingly take on the responsibility of your payments in the event that you can’t afford them. 

Having a guarantor on your side can be extremely beneficial, because this will allow you to access a loan without your own credit being checked (the co-signer’s credit will be checked instead), but you’ll still be able to build and improve your credit as long as you’re making payments on time and in full.

Payday Loans

Of course, another option is to go with a payday loan, but this should really be the last option for most people. These are often seen as predatory as they are designed for people who have bad credit. Sure, they can get you money incredibly fast and are a decent option if you need emergency money quickly, but these often come with extremely high-interest rates and very short terms. So be sure to think of other options before you agree to go to a payday lender for your loan.

Can You Get A Credit Card With A 450 Credit Score?

Getting a credit card with a credit score of 450 can prove difficult. Most lenders require average to excellent credit. However, there are other options available, you can get a secured credit card instead. These cards work just like regular credit cards, except they usually don’t come with the same rewards or perks as one. Instead, they allow you to build your credit scores until you can switch to a regular credit card. Secured cards are easy to qualify for, they simply require you to provide the minimum security deposit, which will also act as your credit limit.

Best Secured Credit Cards Canada

Annual FeeInterest RatesMin. Deposit
Neo Secured Credit$0- 19.99% - 26.99%
- QC: 19.99%-24.99%
Capital One® Guaranteed Secured Mastercard®$5919.8%$75 or $300
Home Trust Secured Visa Card0$ or $59- 19.99% (no annual fee)
- 14.90% (with annual fee)
Vancity enviro™ Secured Visa* card$0 - $39511.25% or 19.50 %$500
TD Cash Secured Credit Card$2927.74% variable APR$300

What Do Bad Credit Lenders Look At Instead Of Credit Scores?

Many online lenders that offer bad credit loans don’t pay any mind to your low or bad credit, instead, many of them will look at your income, debt level, and job stability to determine your creditworthiness. They may also look at your overall financial health, life situation, and reason for the loan to help them in their decision-making process. Additionally, if you go with a secured loan, they’ll assess the value of your asset, whether it’s your car or house. 

What Can You Use A Bad Credit Loan For?

Just like a standard loan, you can use a bad credit loan for anything you need. Whether it is for an emergency, a car repair, to cover this month’s bills or anything in between, a bad credit loan is a versatile credit product that can help cover any cost.  Keep in mind, just because it’s possible to get a loan when you have bad credit, doesn’t mean you should. Regardless of your credit, loans can be expensive and you should only get a loan if you need it and not just to have some extra cash kicking around.

Why Do People Require A Bad Credit Loan?

No matter your financial situation, emergencies can pop up and throw life into a financial mess. In cases like these, loans can be extremely helpful as they allow you to cover the expense without having to pay the entire amount upfront. Unfortunately, bad credit can sometimes disqualify you from getting approved for certain types of loans. 

Many Canadians with bad credit rely on alternatives lenders who specialize in working with bad credit borrowers to get the loans they need. While bad credit loans can be expensive, these can often also help you rebuild your credit.

How To Improve 450 Credit Scores?

One of the better ways to improve your credit is to show that you can handle credit responsibly and pay your bills on time. Here are some ways to help you improve your credit scores: 

  • Make Your Payments – Those with credit scores of 450 may be lacking a positive payment history. Paying your bills, especially the ones that are late is a good first step in improving your credit scores. 
  • Reduce Your Debt-To-Credit Ratio – Your debt-to-credit ratio is another common factor that is used to calculate your credit scores. If you’re carrying a lot of revolving debt from month-to-month, it may be negatively affecting your credit. Paying your bills and reducing your spending will help reduce your credit utilization ratio which may positively affect your credit. 
  • Use A Secured Credit Card – You can also help build your credit by using credit-building products like a secured credit card. These work just like a regular credit card except they require a security deposit for approval, which is also used as your credit limit.  Each payment you make is reported to the credit bureau(s) which can help you improve your 450 credit score. 

450 Credit Score FAQs

Is 450 a low credit score? 

Credit scores that fall between 300 and 559 are considered poor. As such, a credit score of 450 is a low credit score. There are generally two reasons you may have a 450 credit score; a lack of credit history or a past of financial difficulties. 

Can a bad credit loan help me build credit? 

Using a bad credit loan responsibly may help build your credit. However, you need to verify that the lender you’re working with is reporting to the credit bureau.  Similarly, if you have a high debt-to-credit ratio or other outstanding payments, your credit may not improve despite you making on-time payments on your bad credit loan. 

How can I improve my credit scores from 450?

Responsible use of credit and time is the main way to build your credit. Making on-time payments in full and keeping your debt-to-credit ratio low are two ways that can help build your credit. 

Bottom Line About Loans With A 450 Credit Score

Even with a less-than-perfect credit score like 450, you can still get a loan. While these bad credit loans may be more expensive, they are easily attainable from many different lenders. Moreover, they can actually help you raise your credit scores, which can help you access credit in the future.

Kale Havervold avatar on Loans Canada
Kale Havervold

In his over six-year career as a professional writer, Kale has focused on writing about finance, technology, cryptocurrency, entertainment, and sports. Kale's work has been published on Yahoo, RentHop, the Regina Leader-Post,, and Kale loves to create a wide variety of personal finance-related content. Including everything from how-to guides to featured articles, to advice pieces and everything in between. Whether he’s writing about the newest piece of technology or providing tips to help people with their finances, Kale is passionate about educating Canadian consumers and making sure they have the information they need to make the best decisions.

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