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No province in Canada carries as much debt as Alberta. Areas like Calgary and Fort McMurray, in particular, see the average resident carry tens of thousands of dollars of non-mortgage debt.
While many people in Calgary can manage this level of debt effectively, some cannot. In fact, the delinquency rate in the province is growing, which means more people are struggling with staying up to date with their payments and defaulting is common.
This type of behaviour can wreak havoc on your credit if you let it get out of hand. Low credit can make it harder to get loans, but not impossible. Thankfully, many lenders have bad credit loans available for those in Calgary.
What is Bad Credit in Calgary?
But before looking at the types of loans that people with bad credit can get, let’s take a look at what bad credit in Calgary and the rest of Canada is. In Canada, we have credit scores that range from 300 on a low end up to 900 on the high end (check out this article for even more information). Of course, the higher your credit score is, the better your credit is. While each creditor in Calgary will have their own ideas about what is considered good and bad credit, there are some general numbers you can follow:
- Excellent (Scores 780+)
- Very Good (Scores 779-720)
- Good (Scores 719-680)
- Average (Scores 679-620)
- Poor (Scores 619-580)
- Very Poor (Scores 579- 500)
- Terrible (less than 500)
If you are unaware of your credit score, you can reach out to one of the credit bureaus to see it, but many financial institutions also will be able to share your credit score with you. Of course, bad credit can also mean different things to different people. Everyone in Calgary has different financial priorities, so for someone who has struggled all their life with finances, a 700 credit score would be incredible, but to someone who has always had an 850+ credit score, it would be quite a bit worse.
Check out this infographic for more information about credit scores.
What Causes Bad Credit?
So, as you can see, bad credit is something you should look to avoid if at all possible. But what actually causes bad credit? While there are a lot of different reasons for bad credit, one of the biggest is people simply having bad or uninformed financial habits. Some of the bad financial habits that can cause bad credit in Calgary include:
- Living above your means and spending too much
- Not budgeting and/or knowing where your money is going every month
- Trying to “keep up with the Joneses”
- Impulse buying, especially with a credit card
- Not making the monthly payments on your debt
Want to learn how to repair bad credit? This article is for you.
However, it’s not only bad financial habits and neglect/carelessness that can lead to bad credit, as bad credit can be caused by unexpected life events such as:
- Job loss
- Emergencies (unexpected travel, car accidents etc…)
- Medical issue or injury that keeps you from going to work
While these sorts of surprises cannot be predicted, you can do things in your life to make sure they don’t hit you as hard, at least financially, as they could have. This includes things like making sure you have a beefed-up savings account.
Did you know that bad credit can affect your daily life? Click here.
Types of Loans Available To Those With Bad Credit in Calgary
So by now, you are aware that certain lenders in Calgary have bad credit loans available, but what types of loans are available for those with bad credit? While some lenders in Calgary will offer unsecured loans to those with bad credit, they will often have higher interest rates, which can cost you a lot in the long run.
A better option might be to go with a secured loan. If you put up some sort of collateral such as a car or other asset, you can likely get a much better interest rate, even if your credit is subpar. Also, there are plenty of lenders in Calgary who provide loans without a credit check required, so these would be great options if you have bad credit, as well.
What are debt credit lenders looking for in an applicant? Click here.
However, when you are looking for bad credit loans in Calgary, you need to watch out for potential scams. Loan scams will often target those with bad credit as these consumers don’t often have many other options. If a lender or creditor asks for upfront fees or payments, you should also be wary. It is always a better option to be safe, and if you are uneasy about anything, you should steer clear of it.
Finding a Bad Credit Loan in Calgary That Works for You
If you have bad credit and are looking for a loan, be sure to reach out to Loans Canada as we can help set you up with a lender in your area.