Having a low credit score has prevented many from getting loans from a traditional lender like a bank.
A bad credit score also attracts a higher interest rate in loans.
However, if you’re in need of a loan and have a low credit score there’s a solution! Follow the steps in the article below
What is A “Bad” Credit Score?
A bad credit score is attributed to people who are fund of not paying their bills on time or owe too much.
A bad credit score is somewhere between 500 – 619.
Those with a higher credit score has a high chance of getting a loan from a bank and they also receive a flexible interest rate.
While those with a bad credit score are termed “risky” and are often rejected for personal loans by traditional banks.
What Causes A “Bad” Credit Score?
TransUnion and Equifax are in charge of determining a credit score in Canada.
Both of these financial institutions study borrowers and give them a three-digit score based on a number of factors.
Payment History
Late payments on your credit cards, mortgages reduces credit score by default.
Debt Levels
The amount of money you owe and the length of time you owed the money has a negative effect on your credit score. Also note that using more than 40% of your available credit also negatively affects your credit score.
Credit History
Having many years of repayment loan history can increase your credit score.
New Inquiries
Your score can be lowered if lenders performs a “hard credit check”. Applying for many loans during a short period of time is a red flag.
Best Bad Credit Loans in Canada
1. Mogo
Mogo Inc. is a Vancouver-based company, founded in 2003 by David Marshall Feller. The company offers high interest loans, “identity fraud protection”, mortgages, a Visa Prepaid Card, and credit score viewing through Equifax for select customers.
2. Loan Connect
Loan Connect Canada is an online platform that provides Canadians with loans through their search engine.
The company was founded in 2016 with the aim to be Canada’s number one online loan and approval provider.
Their headquarters are in Toronto, but the service is available throughout all provinces and territories in Canada.
3. Borrowell
Borrowell is a legitimate Canadian company, based in Toronto, Ontario. Borrowell is not a credit bureau, but is able to provide free access to credit scores and credit reports through its partnership with one of Canada’s two credit bureaus, Equifax. The other Canadian credit bureau is Trans Union.
4. Loanz
Loanz is an online lender that offers personal loans that are approved quickly, with funds being available in as little as 15 minutes.
The founders of Loanz created the lending platform to provide Canadians with alternative options to get their hands on the cash they need without all the hurdles that often come with traditional loan channels.
The Loanz lending process is entirely digital, so Canadians can apply for a loan from their computer or mobile device without having to physically visit a lender.
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