SECURED CREDIT is best way to show Credit
Bureaus you are a good credit risk
The following message from the Southern Alberta Better Business Bureau provides general information on secured credit:
Individuals who have a poor credit rating
search desperately for ways to re-establish their credit.
The following are ways in which a person can borrow money if he or she has no credit.
- Find a co-signer for the loan. That co-signer would carry the risk of having to pay the loan if you default on payments.
- Take out a loan providing your assets as collateral. If you default on payments those assets would be seized.
- You can get a secured credit card from a major lender
(Editor's Note: Such as Home Trust Secured VISA Credit Card).
This may be issued provided that you deposit upfront the
same amount of security that you wish to borrow.
There are a few things to consider before applying for a
secured credit card. If you have no credit rating, apply at
least once, for a credit card.
If you decide on a secured credit card, you have the option of depositing money in securities such as refundable term deposits. You can get a secured credit card with a limit equal to the amount invested in your security. You cannot remove the security and retain the credit. If you do not make your payments on the credit card, the lender has the right to take the money from your security deposit.
This information was obtained from an article entitled Credit
Cards For Those Who Cannot Get Credit which ran in the
Financial Times May 15 to 21, 1993.
Be aware that you cannot "buy" yourself out of a bad credit rating. You must show the Credit Bureau that you are a good risk by paying your bills responsibly over time.
Be wary of companies that offer you instant credit or
guarantee credit cards as there are no short cuts to repairing
your credit rating.
© Southern Alberta Better Business Bureau 2001
Need Canadian Credit Help Now?
Visit our Product
Page for Canadian Credit Services and Suppliers.