Tag: secured credit card

Categories
Brandon Blog Post

BUILDING YOUR CREDIT WITH A SECURED CREDIT CARD: OUR COMPREHENSIVE 2026 GUIDE

A person confidently reviewing financial documents and building credit with a secured credit card in Canada after insolvency to prove how to building your credit with a secured credit card.
building your credit with a secured credit card

building your credit with a secured credit card

Building Your Credit With A Secured Credit Card: Introduction

Admittedly, filing for a consumer proposal or bankruptcy might feel like a financial life sentence, leaving you deeply anxious about ever renting an apartment or buying a car again. However, the path to recovery is much faster than you think once the overwhelming collection calls finally stop. Therefore, I promise to show you exactly how to rebuild your financial foundation by building your credit with a secured credit card today.

Key Takeaways

  • Undeniably, your credit history is not ruined forever: Insolvency simply resets the clock so you can establish a healthy, fresh start.
  • Crucially, timing is everything: You can start rebuilding as soon as your consumer proposal is accepted or your bankruptcy is discharged.
  • Specifically, secured cards are your best tool: Using a secured credit card responsibly is the safest, fastest way to boost your score in Canada.
  • Additionally, keeping utilization low is vital: Maintaining your credit utilization below 30% dramatically accelerates your rating improvement.
  • Ultimately, patience always pays off: Consistent, on-time payments will drastically improve your credit profile within a predictable 12 to 18 months.

What is Building Your Credit With A Secured Credit Card?

Specifically, building your credit with a secured credit card means using an upfront cash deposit as collateral to open a revolving credit line, which then reports your positive payment history to major credit bureaus. Interestingly, unlike regular unsecured loans, this cash deposit completely removes the risk for the lender. Consequently, major financial institutions are highly willing to approve you even right after an insolvency filing. Furthermore, this specific tool serves as your primary stepping stone back into the mainstream Canadian lending market.

Importantly, secured credit cards typically require a minimum cash deposit of $300 to $500. — Source: [FAQs About Rebuilding Credit With Secured Credit Cards, Ride Time, August 15, 2017]. Therefore, if you provide a credit card company with a $500 deposit, your spending limit becomes exactly $500. Next, as you make everyday purchases and pay off the balance, your good behavior is continuously recorded by the credit bureaus. Ultimately, this creates a fresh, undeniably positive track record on your active file.

Indeed, at Ira Smith Trustee & Receiver Inc., we constantly advise our clients that this strategy is the absolute fastest way to bounce back. Fortunately, filing for insolvency clears away the broken structure, but a secured card pours the new, solid concrete foundation. Currently, thousands of Ontarians use this exact method every single year to reclaim their financial independence. Ultimately, this proactive approach turns a highly stressful situation into an empowering fresh start.

Why Building Your Credit With A Secured Credit Card Matters After Insolvency

Unquestionably, secured credit cards matter after insolvency because they are the only reliable, guaranteed method to demonstrate new financial responsibility to Equifax and TransUnion. Sadly, mainstream banks will temporarily deny you unsecured loans following a personal bankruptcy or a proposal. Therefore, you desperately need a specialized financial tool to break this frustrating cycle of rejection. Actually, this is exactly where the Canadian cash deposit system becomes incredibly valuable.

Surprisingly, 140,457 Canadians filed for consumer insolvency in 2025. — Source: [Office of the Superintendent of Bankruptcy, Report Insolvency Statistics in Canada — December 2025.]. Consequently, a massive portion of the population is actively looking for proven ways to rebuild their financial lives. Fortunately, secured cards offer a direct, highly accessible pathway for these hard-working individuals. Indeed, these specific cards report directly to the national credit bureaus just like traditional, unsecured lending products.

Clearly, a low credit score is only temporary, and your actions today will dictate your financial freedom tomorrow. Moreover, establishing a new, active trade line shows future lenders that you have deeply learned from past financial challenges. Eventually, this consistent reporting buries your old financial mistakes under a massive mountain of good financial habits. Thus, utilizing this strategy is absolutely vital for your long-term economic success.

Understanding R7 and R9 Credit Ratings

Technically, understanding R7 and R9 credit ratings means recognizing how major bureaus legally classify your specific type of insolvency filing in Canada. Specifically, an R7 rating indicates a special arrangement to settle debts, such as a consumer proposal in Ontario. Conversely, an R9 rating is the lowest possible score, signifying bad debt or a formal bankruptcy filing. Consequently, these standardized labels temporarily alert future lenders to your past financial difficulties.

Factually, roughly 78% of consumer insolvencies in Ontario are now proposals rather than bankruptcies. — Source: [Office of the Superintendent of Bankruptcy, report Insolvency Statistics in Canada — November 2025.]. Therefore, the R7 rating is becoming incredibly common among honest, hard-working Canadians. Fortunately, this rating is definitely not a permanent black mark on your identity. Eventually, the credit bureau completely purges this negative data from your active credit file.

A person confidently reviewing financial documents and building credit with a secured credit card in Canada after insolvency
building your credit with a secured credit card

How Soon Can You Start Building Your Credit With A Secured Credit Card If You Make An Insolvency Filing?

Fortunately, you can start building your credit with a secured credit card immediately after your consumer proposal is officially accepted or your bankruptcy is fully discharged. Honestly, one of the most common questions we receive as Licensed Insolvency Trustees is regarding this exact timeline. However, you must patiently wait for the official legal approval before applying for new trade lines. Otherwise, premature applications can result in hard credit inquiries that unintentionally damage your score further.

Notably, a consumer proposal remains on your Equifax report for 3 years after completion. — Source: [Financial Consumer Agency of Canada, October 15, 2025]. Similarly, a first-time bankruptcy stays on your public record for 6 to 7 years after discharge (Equifax – 6 years, TransUnion – 7 years). — Source: [Financial Consumer Agency of Canada, October 15, 2025]. Regardless, you absolutely do not have to wait for these black marks to fall off before you start repairing your profile. Actually, lenders love a comeback story backed by recent, highly positive data.

For building your credit with a secured credit card after filing for insolvency, Licensed Insolvency Trustees advise that the process can begin immediately upon approval, provided you keep your credit utilization under 30%. Specifically, taking action early creates a parallel track of excellent history alongside the older negative marks. Consequently, by the time your R7 or R9 rating legally drops off, you will already possess a fantastic credit score. Unquestionably, proper timing and steadfast patience are your best friends here.

The Core Process: Building Your Credit With A Secured Credit Card Step-by-Step

Systematically, the core process of your step-by-step building your credit score with a secured credit card involves saving a deposit, applying for the right secured product, keeping balances low, and paying your bill in full every single month. First, you must diligently save your security deposit by setting aside a small amount from each paycheque. Realistically, treating this deposit as a direct investment in your financial future completely changes your entire perspective. Soon, you will have the required $300 to $500 ready to securely invest.

Next, you must carefully apply for a card that specifically caters to credit rebuilding in Canada. Crucially, make sure the financial institution officially reports to both Equifax and TransUnion. Otherwise, your hard work will not actually improve your national credit rating. Fortunately, several highly reputable Canadian financial companies offer these exact, bureau-reporting products.

Importantly, payment history accounts for roughly 35% of your total credit score. — Source: [Equifax Canada]. Therefore, paying the balance in full and on time every single month is the most critical step you can take. Deliberately, you should never carry a rolling balance, and you should never pay unnecessary credit card interest. Ultimately, extreme consistency over time proves to cautious lenders that you are now highly reliable.

Mastering Credit Utilization

Strategically, mastering credit utilization means keeping your total borrowed balance strictly below 30% of your available credit limit at all times. Interestingly, this is a powerful secret to outsmarting the credit system that many Canadians unfortunately overlook. For example, if your hard limit is $500, you should never let your monthly balance exceed $150. Consequently, this remarkably low usage signals to lenders that you are not desperate for borrowed funds.

Factually, credit utilization makes up 30% of your credit score calculation. — Source: [Equifax Canada]. Furthermore, actively keeping this specific ratio low is the second most impactful action you can ever take. Specifically, we highly recommend using the secured card for small, predictably recurring expenses like a monthly Netflix subscription. Then, simply pay that tiny amount off immediately to secure the positive reporting.

Avoiding Common Rebuilding Mistakes

Crucially, avoiding common rebuilding mistakes involves dodging predatory lending traps and refraining from applying for too many credit lines at once. Unfortunately, many predatory lenders maliciously target recently discharged individuals with high-interest, unsecured installment loans. Consequently, these toxic loans often trap vulnerable consumers in a fresh cycle of unmanageable debt. Therefore, sticking exclusively to secured, low-limit products is vastly safer for your recovery.

Shockingly, multiple hard credit inquiries within a short period can temporarily drop your score by up to 10 points per check. — Source: [Capital One, January 28, 2025]. Thus, you must deliberately space out your applications very strategically. Instead, proudly apply for a single secured card and focus entirely on nurturing that one account. Ultimately, slow and exceptionally steady progress always wins this financial race.

Tools for Tracking, Applying for and Building Your Credit With A Secured Credit Card

The best tools for tracking and applying include free Canadian credit monitoring apps like Borrowell and Credit Karma, as well as reputable financial institutions that offer secured products. Fortunately, monitoring apps safely let you watch your score improve in real time without hurting your rating. Moreover, seeing the three-digit number climb provides incredible emotional relief and powerful daily motivation. Additionally, choosing the right physical card is just as fundamentally important as tracking it.

Visually, comparing your distinct options helps ensure you select the absolute best product for your specific financial situation. Below, we have clearly outlined some of the top secured options actively available to Canadians post-insolvency.

Tool / Card NameMinimum Deposit RequiredReports to Major BureausBest Feature
Capital One Secured Mastercard$75 to $300 (varies by file)Yes (Equifax & TransUnion)Guaranteed approval for most bankruptcies
Neo Secured Credit Card$50Yes (Equifax & TransUnion)Flexible limit and cash back rewards
Home Trust Secured Visa$500Yes (Equifax & TransUnion)No annual fee option available
Borrowell AppN/A (Free Digital Tool)N/A (Pulls from Equifax)Weekly free credit score updates

Undoubtedly, reviewing a screenshot of your initial credit report from these monitoring apps will greatly help you establish a factual baseline. Then, you can accurately track your upward progress month by month. Specifically, according to Brandon Smith, Senior Vice-President of Ira Smith Trustee & Receiver Inc., building your credit with a secured credit card in Canada is highly effective because your upfront cash deposit acts as collateral, allowing major credit bureaus like Equifax and TransUnion to safely record your positive payment history.

Ultimately, heavily leveraging these digital tools guarantees you stay firmly on the right path.

Encouragingly, over 75% of Canadians who use secured cards see score improvements within 12 to 18 months. — Source: [Canadian Credit Counselling Society, How to Rebuild Your Credit in Canada – 7 Points, January 10, 2025]. Consequently, utilizing these exact modern tools turns a deeply confusing ordeal into a simple, highly manageable routine. Indeed, financial technology has miraculously made rebuilding credit significantly easier than ever before.

A person confidently reviewing financial documents and building credit with a secured credit card in Canada after insolvency to prove how to building your credit with a secured credit card.
building your credit with a secured credit cardf

Next Steps for Your Financial Recovery

First, absolutely ensure you have completed all mandatory counselling sessions required by your Licensed Insolvency Trustee. Legally, these critical sessions are strictly mandatory to properly receive your official Certificate of Full Performance in a proposal or a discharge from bankruptcy. Afterwards, you are finally given the bright green light to proceed forward.

Remarkably, individuals who actively monitor their credit are 40% more likely to maintain a good score long-term. — Source: [TransUnion, January 31, 2024]. Therefore, you should immediately download a free Canadian monitoring tool today. Next, promptly open a dedicated, separate savings account specifically for your security deposit. Clearly, proactively breaking the recovery process down into small, highly actionable weekly goals makes it entirely achievable.

Excitingly, upgrading to an unsecured card involves demonstrating 12 to 18 months of flawless payment history on your secured account, prompting the lender to cheerfully return your initial cash deposit. Normally, the financial institution will automatically review your file after a full year of consistent, responsible usage. Subsequently, if your track record is entirely spotless, they will eagerly offer to transition your account to a standard line of credit. Immediately, this distinct transition signals a massive, life-changing victory in your rebuilding journey.

Historically, secured cardholders who maintain zero missed payments for 18 months are 85% more likely to be approved for standard credit products. — Source: [Neobank – No Credit Check Credit Card Canada: Real Alternatives 2026, January 29, 2026 ]. Furthermore, this earned upgrade often dramatically comes with a welcomed credit limit increase. Consequently, this much higher limit instantly and vastly improves your overall credit utilization ratio. Unquestionably, this strategic upgrade creates a compounding, highly positive effect on your total score.

Frequently Asked Questions (FAQs): Building Your Credit With A Secured Credit Card

If you’re looking to bounce back from financial setbacks, you likely have plenty of questions about where to start. Secured credit cards are often the first step. Here is a breakdown of how they work and how you can use them to reclaim your credit score.

Q: What exactly is a secured credit card?

A: Think of a secured credit card as a revolving credit line with a safety net for the bank. You provide an upfront cash deposit, which acts as collateral. This essentially removes the risk for the lender, meaning they are far more likely to say “yes” to your application—even if you’ve recently filed for insolvency. Generally, the amount you put down becomes your spending limit.

Q: How soon can I start rebuilding my credit after insolvency?

A: You don’t have to wait years to start over. You can actually begin the process as soon as your consumer proposal is officially accepted or your bankruptcy is fully discharged. A quick word of caution: make sure you have that official legal approval in hand before you start applying. Jumping the gun can lead to “hard” credit inquiries that might ding your score before you’ve even had a chance to build it up.

Q: How much of a security deposit will I need?

A: Most cards in Canada look for a deposit of somewhere between $300 and $500. However, there is some flexibility depending on the provider. For instance, the Neo Secured Credit Card allows you to start with as little as $50. Others, like Capital One, might range from $75 to $300 based on the specifics of your credit file.

Q: What is credit utilization, and why does it matter so much?

A: Credit utilization is just a fancy way of describing the ratio between what you owe and your total limit. It’s a huge factor—accounting for about 30% of your total credit score.

To keep your score trending upward, try to keep your balance below 30% of your limit. For example, if your limit is $500, you really shouldn’t carry a balance higher than $150. It shows lenders you can manage credit without leaning on it too heavily.

Q: How long does it take to see an improvement in my score?

A: Consistency is the name of the game here. If you make every payment on time, you’ll likely see a significant shift in your credit profile within 12 to 18 months. In fact, research indicates that over 75% of Canadians using secured cards see a noticeable improvement in their score within that window.

Q: What is the difference between an R7 and an R9 credit rating?

A: In Canada, credit bureaus use these codes to classify your debt. An R7 rating means you’ve made a special arrangement to settle your debts (like a consumer proposal). An R9 is the lowest rating possible, usually reserved for bad debts, accounts sent to collections, or formal bankruptcy filings.

Q: Do these cards report to both major Canadian credit bureaus?

A: Most reputable lenders will report your activity to both Equifax and TransUnion. This is vital for your recovery, as your payment history makes up roughly 35% of your total score. If the lender doesn’t report to both, you’re only doing half the work.

Q: Can I eventually get my security deposit back?

A: Yes! If you show a flawless track record of payments for 12 to 18 months, many lenders will review your account automatically. If they see you’ve been responsible, they’ll often return your initial deposit and “graduate” you to a standard, unsecured credit card.

Q: What common mistakes should I avoid?

A: The biggest trap is applying for too many things at once. Each “hard” inquiry can pull your score down by up to 10 points. Also, stay away from predatory lenders offering high-interest unsecured loans. They might seem like an easy fix, but they often lead right back into a cycle of debt.

Q: Are there tools to help me track my progress?

A: Absolutely. Apps like Borrowell and Credit Karma are great for monitoring your score in real-time without hurting your rating. Staying informed pays off—data shows that people who actively monitor their credit are 40% more likely to maintain a healthy score in the long run.

Brandon’s Take On Building Your Credit With A Secured Credit Card

Ultimately, building your credit with a secured credit card is the most powerful, legally proven method to reclaim your financial independence after a difficult insolvency filing. Undeniably, navigating daily life after a consumer proposal or bankruptcy can deeply feel like a confusing mix of profound relief and temporary uncertainty. However, you absolutely now possess the exact, step-by-step blueprint desperately needed to succeed. Furthermore, the societal stigma of insolvency is entirely unwarranted; you simply made a brilliant, highly strategic choice to fix your foundation.

Confidently, thousands of Canadians successfully complete this exact financial journey every single year, brilliantly proving that recovery is entirely within your reach. Therefore, please stay incredibly patient, keep your credit utilization perpetually low, and always pay your balances in full. Eventually, the mainstream banks that once harshly turned you away will be eagerly offering you their premium lending products again. Ultimately, your beautiful, well-deserved fresh start is already wonderfully underway.

Building Your Credit With A Secured Credit Card: Conclusion

Finally, if you are currently silently struggling with overwhelming debt and have not yet filed, please do not suffer in silence for another single day. Reach out directly to the deeply compassionate experts at Ira Smith Trustee & Receiver Inc. for a free, entirely confidential consultation. Together, we can permanently eliminate your financial stress and safely guide you back toward total peace of mind. Truly, starting over is not giving up; it is fiercely taking control of your amazing future.

Don’t let the silent threat of a personal guarantee lead to financial ruin. Contact Ira Smith Trustee & Receiver Inc. today for a free, no-obligation consultation. We are here to help you understand your situation, explore your legal options under Canadian insolvency law, and create a clear path towards a debt-free future. You deserve a fresh start, and we are here to help you achieve it.

Take the first crucial step towards a brighter financial future for your business. Contact Ira Smith Trustee & Receiver Inc. today to schedule your free initial consultation. Your business’s pivot to sustainable success starts now.

Don’t let financial uncertainty dictate your future. If you or your business is struggling with debt, losing sleep, or facing the possibility of legal action, contact Ira Smith Trustee & Receiver Inc. today. We offer a free, confidential consultation to discuss your situation, explain your options in plain language, and help you develop a clear, actionable plan. Our team of Licensed Insolvency Trustees is dedicated to providing the compassionate, professional support you need to regain control and achieve a debt-free life. Take the first step towards a brighter financial future – call us now.

Ira Smith Trustee & Receiver Inc. is licensed by the Office of the Superintendent of Bankruptcy and is a member of the Canadian Association of Insolvency and Restructuring Professionals.

  • Phone: 905.738.4167
  • Toronto line: 647.799.3312
  • Email: brandon@irasmithinc.com

——————————————————————————–

Disclaimer: This analysis is for educational purposes only and is based on the cited sources and my professional expertise as a licensed insolvency trustee. The information provided does not constitute legal or financial advice for your specific circumstances.

Every situation is unique and involves complex legal and factual considerations. The outcomes discussed in this article may not apply to your particular situation. Situations are fact-specific and depend on the particular circumstances of each case.

Please contact Ira Smith Trustee & Receiver Inc. get in touch with Ira Smith Trustee & Receiver Inc.

About the Author:

Brandon Smith is a Senior Vice-President at Ira Smith Trustee & Receiver Inc. and a licensed insolvency trustee serving clients across Ontario. With extensive experience in complex court-ordered receivership administration and corporate insolvency & restructuring proceedings, Brandon helps businesses, creditors, and professionals navigate challenging financial situations to achieve optimal outcomes.

Brandon stays current with landmark developments in Canadian insolvency law. He brings this cutting-edge knowledge to every client engagement, ensuring his clients benefit from the most current understanding of their rights and options.

A person confidently reviewing financial documents and building credit with a secured credit card in Canada after insolvency
building your credit with a secured credit card
Categories
Brandon Blog Post

3 TOP WAYS TO SUCCEED IN CREDIT REPAIR USING A CREDIT CARD FOR REBUILDING CREDIT

We hope that you and your family are safe, healthy and secure during this COVID-19 pandemic. Ira Smith Trustee & Receiver Inc. is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

Credit card for rebuilding credit: Introduction

Money mistakes in the past can negatively impact your credit score and your ability to qualify for a loan or obtain a good interest rate. Fortunately, there is hope. Bad credit scores can be improved in Canada by the use of perseverance and some time. You might even qualify for a credit card for rebuilding credit in Canada.

This Brandon Blog shows you how to take control of your finances, including learning how to use a credit card for rebuilding credit to improve your credit rating.

credit card for rebuilding credit
credit card for rebuilding credit

A credit card for rebuilding credit for people with bad credit is not your first step

Getting a copy of your credit report is the best way to determine which areas need improvement when it comes to repairing your credit. How many late or missed payments have you had in the past? The credit bureaus can report past due utility payments, outstanding cell phone bills, and old parking tickets. Have you exceeded your debt utilization ratio? Did you experience bankruptcy in your past?

Could your credit report be inaccurate? This is something that needs to be brought to the creditor’s attention so that they can fix the problem and revise their reporting. As an alternative, you can provide proof to the two credit reporting agencies in Canada, so that each can correct the error.

credit card for rebuilding credit
credit card for rebuilding credit

A credit card for rebuilding credit Canada is not your next step either

Now that you know your debts need to be addressed, you need to figure out how to get your payments in order. You need to develop smart spending and saving habits to rebuild your credit score. One of the best ways to do this is to create a budget that reflects your income and expenditures. In my Brandon Blog, I have written extensively about the importance of household budgets. Budgets are essentially a plan for how you will spend your money. Following a budget will help you with having normal and current payment activity.

Getting comfortable with not overspending and living within your means should become a habit. You don’t have to give up every nice dinner or outing just because you have a budget, but you do have to be aware of how much income you have available to spend and save after taxes. This will allow you to be able to make all necessary payments on time.

Next, you must establish better credit history through consistent payments. Your payment history is the most important factor in determining your credit score, so if you’ve fallen behind on your payments – or haven’t been paying on time – your credit situation is unlikely to improve until you catch up on your accounts. Without improving on this, you cannot fix a poor credit score. Spoiler alert – making only the minimum payment each month against your regular credit card is not keeping current on that debt.

If you cannot pay your overdue accounts right now, call up your creditors. Maybe you can negotiate a special repayment plan that fits your budget. Cut your debt as much as possible. Credit utilization ratios are very important. If your various types of credit, such as credit card balance, line of credit, or overdraft are used more than three-quarters of your available credit, that will bring down your credit score.

With time, patience, and financial discipline, building a better credit history and credit score – even rebuilding credit after bankruptcy – can be done. In the beginning, you may need to only use cash, and preferably not your debit card, for all of your necessary everyday purchases. Put your credit cards away to avoid temptation. Knowing that if you do not follow your budget you will run out of money is a strong motivation to stay on track when you only take out the amount of cash your budget says you can afford to spend.

One of the first steps to rebuilding credit with a credit card might be to lock each traditional credit card away and not use them!

credit card for rebuilding credit
credit card for rebuilding credit

Prepaid Credit Cards vs. Secured Credit Cards: What’s the Difference?

Prepaid cards are sold at many retail locations, such as grocery stores and pharmacies. A service fee is charged when you load money onto the card and when you use it. So not all the money you load onto the card is applied to your purchases. Whenever you do buy something with this kind of credit card, the dollar amount of your purchase is deducted from your cash balance.

You can still get a prepaid credit card without having a good credit score. That is because by getting this type of card, you are not applying for or getting credit from anyone. To load it, you use your own money. To put money onto a prepaid card you can: (i) transfer money from your bank account onto the card; or (ii) give cash to the clerk who will add it to the card at the store that sold it to you.

Prepaid cards are not credit cards in the traditional sense, so they won’t help you build credit or repair credit. In the same vein, it is not a credit card for rebuilding credit.

One of the requirements of a secured credit card is that you need to pay a cash deposit. Once the deposit is made, the credit limit is equal to the amount of the deposit. The security deposit that you pay is collateral held onto by the credit card issuer in return for the credit they are extending to you. If you don’t repay your balance on time, the credit card company can use this security deposit to pay off your debt. Once you have paid the security deposit, you can use the secured credit card.

The normal size of payment of security deposit typically varies from $500 to $10,000. You can get a secured charge card if you do not get approved for a standard unsecured credit card. Those with a poor credit history looking for a credit card for rebuilding credit will certainly find a charge card of this kind beneficial. Secured cards do not require a credit check because the financial institution is protected by the down payment. Consequently, you are practically certain to be authorized.

You will boost your credit rating as you make purchases and repay your full balance outstanding every month with this type of card. It is because the issuer of the secured credit card is really giving you credit. Your balances as well as payment history are reported frequently to the two credit bureaus in Canada. You can enhance your credit score over time by making your full regular monthly payments when due. Any individual aiming to use a credit card for rebuilding credit should seriously look into getting a secured credit card.

credit card for rebuilding credit
credit card for rebuilding credit

Credit card for rebuilding credit: Secured credit cards vs. unsecured credit cards

There are differences between secured cards and unsecured credit cards. An unsecured credit card is a routine charge card that can be made use of day-to-day as much as the credit limit allows. The issuer of these types of traditional charge cards makes a hard credit check inquiry right into your credit report when you apply for one. An unsecured card does not need a down payment. An unsecured charge card normally has a higher credit limit, and some credit card companies offer with their unsecured cards benefits like cashback, price protection, a better interest rate on purchases or travel points.

You can ask if your secured card can be turned into an unsecured one after an amount of time (and your security deposit returned). I would say that a reasonable time period would be six months to a year of making consistent payments on time as well as staying within your credit line. You have to demonstrate that you can handle credit properly.

Credit cards, both secured and unsecured, report your activity to the credit bureaus. If you use the card responsibly, you can build or rebuild your credit. Look around carefully to find the right credit card for your financial and credit score situation that will help you rebuild your credit. Secured, unsecured, low-interest rate, travel benefits and even guaranteed approval credit cards are available from many financial institutions in Canada.

Picking the ideal credit card for rebuilding credit is really crucial. While some bank cards have an annual cost, others do not. You must constantly check out the fine print in the contract when picking a credit card. I wish you great success in your financial journey.

credit card for rebuilding credit
credit card for rebuilding credit

Credit card for rebuilding credit: Summary

I hope you found this credit card for rebuilding credit Brandon Blog post informative. Are you worried because you or your business are dealing with substantial debt challenges and you assume bankruptcy is your only option? Your situation may be so dire that a redone budget and a secured credit card may not be enough of an answer. If it is too much debt for any reason, call me. It is not your fault that you remain in this way. You have actually been only shown the old ways to try to deal with financial issues. These old ways do not work anymore.

The Ira Smith Team utilizes new modern-day ways to get you out of your debt difficulties while avoiding bankruptcy. We can get you the relief you need and so deserve.

The tension put upon you is big. We know your discomfort factors. We will check out your entire situation and design a new approach that is as unique as you and your problems; financial and emotional. We will take the weight off of your shoulders and blow away the dark cloud hanging over you. We will design a debt settlement strategy for you. We know that we can help you now.

We understand that people and businesses facing financial issues need a realistic lifeline. There is no “one solution fits all” method with the Ira Smith Team. Even though we are licensed insolvency trustees, we have found that not everyone has to file bankruptcy in Canada. The majority of our clients never do. We help many people and companies stay clear of bankruptcy.

That is why we can establish a new restructuring procedure for paying down debt that will be built just for you. It will be as one-of-a-kind as the economic issues and discomfort you are encountering. If any one of these seems familiar to you and you are serious about getting the solution you need, contact the Ira Smith Trustee & Receiver Inc. group today.

Call us now for a no-cost consultation. We will get you or your business back up driving to healthy and balanced trouble-free operations and get rid of the discomfort factors in your life, Starting Over, Starting Now.

credit card for rebuilding credit
credit card for rebuilding credit

We hope that you and your family are safe, healthy and secure during this COVID-19 pandemic. Ira Smith Trustee & Receiver Inc. is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

Categories
Brandon Blog Post

DEBT MANAGEMENT IN ONTARIO PLAN: HOW TO GET A METICULOUS ONE TO WORK FOR YOU IMMEDIATELY

We hope that you and your family are safe, healthy and secure during this coronavirus pandemic.

Ira Smith Trustee & Receiver Inc. is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

If you would prefer to listen to the audio version of this Brandon Blog, please scroll to the very bottom and click play on the podcast.

debt management in ontario
debt management in ontario

What is debt management in Ontario?

The term “debt management in Ontario” can mean a lot of things to Ontario residents. There are debt management companies that offer a range of services, from credit counselling to debt settlement. In Ontario, these organizations offer their debt management services exclusively to individuals and not to businesses. Debt management is a process that helps you manage your debt and get it under control. A debt management program can only be successful if the person also learns new behaviours in how they deal with money and debt.

WARNING: The Canadian government has put out a consumer alert. This alert, titled Consumer Alert: What you need to know when getting help to pay off debt or repair your credit, warns Canadians about unscrupulous debt settlement companies and what you need to know. In many Brandon Blogs, I have also put out that same warning. There are only two choices when seeking the right credit counsellor to review your alternatives to deal with out-of-control unsecured debt, including tax debt. Legitimate debt management services in Ontario are provided via two types of specialists: accredited community-based non-profit credit counselling agencies and federal government accredited and supervised licensed insolvency trustees.

I recognize that debt is a huge issue for many people in Ontario and all of Canada. Most individuals do not also understand the massive influence it can have on them but trust me, it is all too genuine. In this Brandon Blog post, I review the different alternatives readily available to people looking for debt management in Ontario.

What is debt management in Ontario plan?

A debt settlement plan (debt management plan or DMP) is a tool supplied by a non-profit credit counselling agency that can help you get control of your money and back on course to living the debt-free life you wish to lead. Your dedicated credit counsellor can help you identify if becoming part of a DMP is appropriate for you. If not, the non-profit credit counsellor can lay out all your available alternatives.

For hard-working people who struggle to meet their monthly bills, a debt management plan might be the answer. Under the terms of a DMP, a person consolidates all of their unsecured debt under one plan. This plan, developed by any one of the many qualified counsellors, usually involves making a single regular payment, a monthly payment, under a debt repayment program, to the credit counselling service. The non-profit accredited credit counselling agency then distributes this money to creditors.

This kind of repayment plan can take normally as long as 5 years to pay off 100% of your unsecured type of debt, but it can also be the solution that allows a person to become debt-free quickly. It’s important to note that such an informal debt management in Ontario plan may not be the best option for everyone.

What to consider before you sign up for debt management in Ontario

There is one major thing to consider before you sign up for a DMP. Before you take out a DMP, you want to make sure that you are in a position that allows you to pay off your debt without the assistance of your creditors.

In a DMP, you are promising to pay your creditors 100% of the principal you owe them when entering into the debt management plan, with no reduction from the total owing. So you need to have established a realistic budget working with your credit counsellor, for the entire DMP period showing you will be able to afford to maintain the monthly payment you are promising to make.

Will creditors continue to contact me while I’m on a Debt Management Plan?

debt management in ontario
debt management in ontario

Most people view the DMP as merely a temporary solution until you have paid off all debts. But in fact, if done properly and taken seriously, it is a legitimate solution and behavioural modification program. If you learn the budgeting skills and accept the financial advice in the program and follow them as a permanent change to your money management behaviour, it will allow you not only to focus on paying down your debt load while you are in the program but teach you the necessary skills to not get into financial crisis in the future. You will have the money to make each regular payment to pay off your normal bills and live a financially healthy life.

Once you’ve signed up for a DMP, your credit counsellor will communicate with your unsecured creditors to advise that you are under their program and that payments to creditors will be coming from the non-profit credit counselling agency. Your unsecured creditors will note that in their respective files and focus their communications to be with the debt management program credit counselling agency.

Does debt management in Ontario hurt your credit?

Most people entering a program for debt management in Ontario are on the financial edge of the ledge already. If they default on their debts, it will produce a lower credit score. While a DMP will lower your credit score at first, in the long run, if you keep up with the program and stick to your payment schedule and make your debt payment plan payments on time as agreed, your credit score will eventually improve.

Do I have to give up my credit cards in debt management in Ontario Program?

The question of whether you need to give up your credit cards in a DMP is among the most common inquiries we get asked by debtors. The answer is although there is no law that says you must surrender your bank card for financial debt management in Ontario plan, you do need to quit borrowing. This includes using your existing credit cards.

However, you can still utilize a secured credit card up to the limit you set with your financial institution that issued it. More likely though, the credit card firm will certainly remove your account once they obtain notification of your DMP.

When you’ve effectively finished your financial debt management in Ontario program, you will become eligible for a normal credit card once more.

What to do during your debt management plan

The Canadian government recommends that you:

  • ask the credit counselling agency for timely written reports on the status of your plan,
  • keep good records of all amounts you pay to the agency, and
  • get receipts of all money you pay to them as well as regular reports of amounts they pay to your unsecured creditors for you.

Carefully review your records and the regular reporting you receive from the agency. Ensure they are paying your creditors on time. This will keep you clear of any type of late fees or further adverse notations on your credit report.

debt management in ontario
debt management in ontario

What are the disadvantages of debt management in Ontario plan?

There are a few possible drawbacks to hopping on a DMP. However, in my view, they are not enough to stop you from doing one if you can afford it. The disadvantages are also common to any debt settlement in Ontario plan.

In no particular order, they are:

  • It won’t cover every one of your outstanding debts. DMPs typically won’t include your secured debts and some unsecured debts, such as student loans. This is especially true if you are still in university or college, have not finished your course of study and need to continue to apply for student loans because you wish to continue either as a full-time or part-time student.
  • Credit counsellors can guide you but will have to take your secured debt payments into account when establishing your monthly budget. You’ll typically need to manage those debts on your own. If you do not have any money left over each month after accounting for secured debt payments, rent or mortgage, food, income tax and other essential monthly purchases, then a DMP will not be possible for you.
  • There could some service charges to pay for the DMP.
  • As indicated above, no real accessibility to credit.

During the initial counselling session, the credit counsellor can help you review your realistic options. Perhaps you can still qualify for an Ontario debt consolidation loan. Keep in mind that if that is an option, you will need to be mindful of the effective interest rate you will be paying on your loan, albeit at an annual rate much less than on your existing debt.

If neither a DMP nor a debt consolidation program are viable debt consolidation options or debt settlement options for you, then you will need to explore with a licensed insolvency trustee the other debt relief options of either a consumer proposal or bankruptcy to eliminate your unsecured debt.

How long can you legally be chased for debt in Ontario?

The answer is two years. A Judge of the Ontario Superior Court of Justice In Bankruptcy and Insolvency recently released a decision. It was an appeal from the decision of a Master sitting in the same court. The case was about the issue of a claim which is statute-barred under the Ontario Limitations Act.

Section 4 of this Act says that you cannot enforce an outstanding debt for a claim the creditor has after 2 years from when the claim was discovered. This includes the day on which a creditor initially should have recognized they had a claim which called for enforcement.

This case was about a creditor filing a proof of claim in a debtor’s personal bankruptcy. The licensed insolvency trustee disallowed the claim because the claim was statute-barred. The creditor appealed the Trustee’s decision to the Master sitting in bankruptcy court. The creditor argued that although legal action cannot be taken on the debt, it does not mean that the debt still does not exist. The Master dismissed the creditor’s appeal and upheld the Trustee’s decision.

The creditor then appealed the Master’s decision to a Judge sitting in the same court. The Judge reviewed the matter and upheld the Master’s decision.

What this decision says is that not only can a debtor not be chased for a debt if no legal action was commenced within the 2 year period, they can’t even file a proof of claim in the debtor’s consumer proposal or bankruptcy!

However, keep in mind that just because it is no longer a legal debt, the creditor would have made a notation with the credit bureau for your credit report before the two-year period ended. So the damage to your credit score has already taken place.

Can a Trustee do a debt management plan?

The answer is a Licensed Insolvency Trustee can do for you the equivalent of a DMP. Consumer proposals can only be administered by a Trustee. Consumer proposals are also the only federal government-approved debt settlement plan in Canada. To be equal to the result of a DMP, you would offer to your unsecured creditors to pay them 100% of all the unsecured debt that you owe. Remember, above I stated that a DMP pays 100% of your unsecured debt.

There are many similarities between a consumer proposal and a DMP if you offer 100%. But as I indicate below, you can still have a successful consumer proposal by offering less than 100% to settle all of your unsecured debts. For details on how a consumer proposal works, check out my Brandon Blog, CONSUMER PROPOSAL FAQ: ANSWERS TO 10 TANTALIZING CONSUMER PROPOSAL QUESTIONS.

debt management in ontario
debt management in ontario

Which is better? A debt management plan In Ontario vs consumer proposal

Everyone’s financial situation is unique. A DMP will not be as harmful to your credit score as with a consumer proposal, nor will it jeopardize any of your assets as with bankruptcy. You’ll also gain money management skills that can help you in the long term and avoid debt in the future. But if you cannot get an Ontario debt consolidation service loan or a debt management plan is not appropriate for you, then there is another formal option that avoids bankruptcy.

In a consumer proposal, you will also gain money management skills. In addition to your no-cost initial consultation, there are also 2 mandatory credit counselling sessions with an accredited credit counsellor in the Trustee’s office. In a DMP, you need to pay 100% of your unsecured debt. In a consumer proposal, the amount you need to pay is calculated against what your unsecured creditors can expect to receive from your bankruptcy. In most cases, it will be much less than 100%. On average, you can expect to only repay about 25% of your total outstanding unsecured debt, including any tax debt.

A consumer proposal is for any person that owes $250,000 or less, other than for any loans secured against your principal residence. If you owe more than this limit, or your company owes too much debt, then you can still get debt relief under a different proposal section of the Bankruptcy and Insolvency Act (Canada) (BIA).

Bankruptcy is of course the very last option anyone should consider. This should be considered only if you do not have the necessary cash flow to successfully complete any debt management plan.

So what is best for you? Give me a phone call and I will let you know whether debt management in Ontario plan or a proposal under the BIA is better for you. I will tell you at no cost to you.

Debt management in Ontario summary

I hope that you found this debt management in Ontario Brandon Blog informative. Many people feel that they are trapped in a cycle of credit card debts, unsecured lines of credit, tax debt and generally an unmanageable level of debt. You may want to do something about those debts but you aren’t sure what to do.

If you have any debts they can be overwhelming because they are so much money and you don’t know how to deal with them. There are various debt management plans available that can help you reduce the amount of money you owe and help you deal with your debts.

If you are concerned because you or your business are dealing with substantial debt challenges and you assume bankruptcy is your only option, call me. It is not your fault that you remain in this way. You have actually been only shown the old ways to try to deal with financial issues. These old ways do not work anymore.

The Ira Smith Team utilizes new modern-day ways to get you out of your debt difficulties while avoiding bankruptcy. We can get you the relief you need and so deserve.

The tension put upon you is big. We know your discomfort factors. We will check out your entire situation and design a new approach that is as unique as you and your problems; financial and emotional. We will take the weight off of your shoulders and blow away the dark cloud hanging over you. We will design a debt settlement strategy for you. We know that we can help you now.

We understand that people and businesses facing financial issues need a realistic lifeline. There is no “one solution fits all” method with the Ira Smith Team. Not everyone has to file bankruptcy in Canada. The majority of our clients never do. We help many people and companies stay clear of bankruptcy.

That is why we can establish a new restructuring procedure for paying down debt that will be built just for you. It will be as one-of-a-kind as the economic issues and discomfort you are encountering. If any one of these seems familiar to you and you are serious about getting the solution you need, Contact the Ira Smith Trustee & Receiver Inc. group today.

Call us now for a no-cost consultation.

We will get you or your business back up driving to healthy and balanced trouble-free operations and get rid of the discomfort factors in your life, Starting Over, Starting Now.

We hope that you and your family are safe, healthy and secure during this coronavirus pandemic.

Ira Smith Trustee & Receiver Inc. is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

Categories
Brandon Blog Post

REBUILDING CREDIT CANADA: USE OUR PAINLESS 3 STEPS TO REBUILD CREDIT SCORE

Rebuilding credit Canada: Introduction

After fully completing a consumer proposal or receiving a discharge from bankruptcy, it is important to start immediately rebuilding credit Canada. The purpose of this Brandon’s Blog is to provide you with our foolproof and painless 3 step plan to eliminate those negative credit checks and fix your credit trouble by rebuilding credit Canada.

Rebuilding credit Canada: Step 1 – Create good habits with a plan for discipline and self-control

After your discharge from bankruptcy or the full completion of a consumer proposal, you must create good habits of discipline and self-control. You won’t have any credit accounts and your goal is to show the credit bureaus that you can use credit responsibly and work your way back from bad credit score.

To do that, you need good new financial habits. You need to start creating a good payment history. A lack of these habits might have been partly responsible for your current situation, so working on changing bad habits, and creating new ones will lay the groundwork for a successful financial future.

Research has shown that on average, it takes more than 2 months before a new behaviour becomes automatic – 66 days in fact. So, while at the beginning, having to be disciplined and exert self-control over spending money mistakes might seem like hard work, stick with it for a couple of months, and very soon it will just become part of your daily routine.

Learn discipline through budgeting. You may be able to find a pretty good yet simple budget calculator spreadsheet. Aside from rebuilding your credit, learning how to create a realistic budget by looking at your essential expenses compared to your current level of everyday purchases. This will allow you to get a good handle on what your income requirements are and then sticking to it is the most important step of rebuilding credit Canada after bankruptcy or consumer proposal.

You’ll be looking closely at your money and personal income anyway, so use this time to get a real grasp on your entire financial situation. Take a look at credit cards and related statements. By only making the minimum monthly payment you are being charged interest. Look carefully at what the rate on purchases is that you are really paying.

Understand where your money comes from, and, more importantly, where you spend every penny. You’re going to need to make friends with spreadsheets and familiarize yourself with all your bank and bill statements. Create categories of all your expenses (e.g. rent, electrical bills, car insurance, groceries etc.) Using your past bank statements, look at your current spending plan in each category. You’ll probably be surprised at how much money you spend in some!

Set limits for how much you will spend per month in each category. This will likely mean making some sacrifices to ensure your budget balances (the total amount being spent does not exceed the total amount coming in). However, be realistic – don’t tell yourself you’re going to stop doing things you enjoy together. Instead, cut down on how often you do them. E.g. the budget spending plan for a meal out could be once a month rather than a couple of times a week.

Get in the habit of planning and recording every single expense, no matter how small. Keep receipts and go over where your money has gone every month. Plan rewards for different milestones along the way. It’s important to have things to look forward to and motivate you along the way.

Budgeting takes discipline and sacrifice but stays focused on the goal. You’re doing this to ensure you don’t fall back into the same bad habits as before. You are going to have to change some things – and what better time than while you’re starting over? You’re already doing the work, now the trick is to make this disciplined.

Practice self-control in your spending (and saving!) The golden rule of spending? Learn to live within your means – it sounds simple, but it can very hard to do. However, those who live within their means do not get into trouble with debt, and that’s what you’re working towards for the future! You’ve created a budget, you know exactly what you can spend in each category, now you need to execute on that. By following your

While in bankruptcy or a consumer proposal, any excess money you earn is going to go to your debtors. That may make it seem impossible to save. However, saving money should always be in your plan.

As soon as you are discharged from bankruptcy or your consumer proposal, start saving money every month. Work a specific amount (we recommend 10%) into your budget so that you learn to live within that new budget spending plan. Setting up automatic payments and transfers into your savings account on payday will ensure your money goes where it needs to before you even have time to think about spending it.

So where should this money go? First, establish an emergency fund so that you can avoid facing bankruptcy again in the future. A good emergency fund should cover at least 3 months of living expenses. Once your emergency fund is built, continue to save by contributing to your RRSP or TFSA as much as you possibly can while still meeting your month-to-month expenses.

Forming good habits of discipline and self-control is key to your permanent financial rehabilitation. Once you do so, you’ll find that building your credit will be relatively easy!

Rebuilding credit Canada: Step 2 – Work to rebuild your credit after bankruptcy or consumer proposal

It is true that a record of your insolvency filing will stay on credit reports. This is so for both a consumer proposal (3 years!) or a bankruptcy (7!). However, you can actually start rebuilding credit Canada right away.

There’s an old saying that goes “The best time to plant a tree was 20 years ago. The second-best time is now.” We recommend that you don’t wait 20 years, or even 3.

Here’s what you need to know to start building credit and improving your credit reports today:

Secured Credit Card – A secured credit card looks and functions just like a regular unsecured credit card, with your lender reporting to the credit bureaus on a regular basis. The only difference is that you put up an initial deposit as a security deposit in the form of cash. The minimum deposit or the maximum deposit you can afford to make acts as collateral upfront makes it a secured credit card. The amount of cash you put up as a deposit dictates your credit limits.

rebuilding credit canada
rebuilding credit canada

This protects the lender from the possibility of you defaulting on what you owe because your security fund will be used to cover any outstanding amounts. When you use this type of card, as far as the vendor is concerned, it acts just like an unsecured credit card. Every month when you pay off the balance by making your payments on time, it is reported to the credit bureaus. Then each credit bureau can update their records showing you are paying it off on time. That is how it can rebuild credit Canada.

A Secured Line of Credit – Much like a secured card, a secured line of credit is a revolving credit that is secured by the money or other security, you offer up in the beginning. As you use your line of credit and you make your payments on time, you will establish a picture of good money reminders habits which will both boost your credit score. These lines of credit are available through most banks. Again, creditworthiness and collateral, if required, set the credit limits.

Create Your Own Credit Building Programs – Credit building programs are one of the most effective methods for rebuilding credit after bankruptcy or consumer proposal. Programs like borrowing a small amount to invest in your RRSP. Then repay the loan in full before the next RRSP year.

This is beneficial in 3 ways: You don’t have to come up with the funds, you are investing in your future and by repaying the loan, you are showing you can handle credit properly which improves your credit score. This should also be combined with a secured card or line of credit, do double up on your credit score building program. Paying your bills on time also improves your credit score.

You want to follow your budget carefully. Avoiding late payments, making the full payment each month on your monthly credit card balance, not just the minimum payment, and don’t have a missed utility payment. Having timely payments and no late payments on your Canadian credit history, will take a poor credit score and start improving your credit rating by creating a new positive credit history.

An improved credit rating and improving credit reports will overturn the negative effects of your bad credit history, get your credit score ranges to improve, get you the credit score increase you deserve and catch the attention of the credit card company and improve your chances of access to credit products.

These new types of credit becoming available to you, and perhaps even existing credit card issuers giving you a credit limit increase, all go towards your rebuilding credit Canada. But you still need to stick to your spending plan. Just because you are getting access to credit again, does not mean you can abandon your proper budgeting. You don’t want to go back to the old habits that produced the poor credit history.

Whatever kind of credit loans you are looking to take out to help rebuild your credit, make sure you understand things properly. Read the credit applications carefully to see what you are really signing up for. If approved, read the credit agreement carefully so you will fully understand all the terms of the rebuilding credit Canada loan product.

As your credit reports improve, you will find new companies offering you new credit accounts and credit card providers either increasing your credit card limit or sending you applications for new credit cards lines. Again a word of caution. Don’t get carried away with all sort of credit products in your daily life. Keep it simple and stick to your budget. You really may only need one regular credit card from amongst the wide range of Canadian credit cards becoming available to you.

rebuilding credit canada
rebuilding credit canada

Rebuilding credit Canada: Step 3 – Maintain your spending plan good habits for the rest of your life

Rebuilding credit Canada is not a one-time event. Think of rebuilding your credit after bankruptcy like losing weight. In the beginning, dragging yourself to the gym and making kale smoothies is hard work. However, as you start to see the weight drop, it becomes easier and easier.

What happens when you reach your goal weight? Do you stop going to the gym and start eating pizza for breakfast? No! You just carry on as you are now – because it’s become a habit, and if you slip back into old habits, you’re quickly going to see all of your hard work come undone.

Regularly checking your full credit reports from both credit reporting agencies will help you see how your good habits are paying off. Kinda like weighing yourself to make sure you’re still where you want to be. If you start seeing negative results, take stock of what’s happening in your life that could be causing it and make changes to quickly get back on track. You want to keep seeing improvement in your credit reports.

Ultimately, whether you’re declaring bankruptcy or entering into a consumer proposal, it will be emotionally difficult. There is a light at the end of the tunnel though. Many people don’t realize that you can start building credit while going through both a bankruptcy or consumer proposal so that at the time of discharge, you’re already a few steps ahead. Follow these steps and you’ll find that rebuilding your credit after bankruptcy isn’t that difficult.

Rebuilding credit Canada: Do you know anyone who needs to get back on the road to financial recovery?

If you have too much debt, are unhappy with your debt situation and need someone to talk to about how a consumer proposal or even personal bankruptcy can fix your credit issues and improve your financial life, call the Ira Smith Team. We are professional credit counsellors and can help you learn good spending habits. Through consumer proposal payment arrangements you can make steady payments on prescribed payment dates. This will allow you to avoid bankruptcy by paying only a fraction of your total debt yet eliminate all of your debt. It will also get you credit repair.

We will listen to your issues and provide you with our thoughts and recommendations for free. That’s right; a no-cost initial consultation. We will look at your debt utilization and make recommendations to you on how to fix it. So why not? All you have to lose is your stress while rebuilding credit Canada. Why not fix things now so that your credit checks improve.

We will advise you whether or not we think you are a candidate for either a consumer proposal or bankruptcy. If we feel you can solve your financial problems without an insolvency process, we will tell you straight. The Ira Smith Team understands the stress you are under and the pain it is causing you and your loved ones.

We can eliminate your pain. I guarantee that you will start feeling better right away after our free initial consultation. Taking action after that will put you on the right path, Starting Over Starting Now

rebuilding credit canada

Categories
Brandon Blog Post

SECURED CREDIT CARD

credit score, bad credit, credit history, financial history, licensed trustee, avoid bankruptcy, bankruptcy alternatives, debt consolidation, credit counselling, consumer proposals, starting over starting now, credit scores, financial health, line of credit, rebuilding creditA secured credit card functions in the same manner as a regular credit card. The only exception being that the card is secured by the amount of deposited funds that remain safeguarded in the institution where the individual acquires the card. The card looks like a regular credit card and acts like a traditional credit card. Purchases are limited by the amount of funds backing the card. The majority of institutions require a minimum secure balance of $500. However, individuals or businesses may deposit more if desired.

Who Uses a Secured Credit Card?

The card might be used by anyone with a past or current history of bad credit. When first starting out, many young people or students have no line of credit. The card might serve as a means of establishing a credit history. Someone recently moving to Canada, having recently undergone bankruptcy or having difficulty obtaining a conventional credit card may also look into acquiring a secured card.

Newlyweds starting a life together often look for ways of establishing credit. Anyone having endured a divorce or the death of a spouse may also need to start over and rebuilding credit. Entrepreneurs having difficulty getting financial backing or searching for a means of creating a financial history might also be interested in securing a card.

Benefits of a Secured Credit Card

Getting approved for a secured card is practically guaranteed. Having a card eliminates the need to withdraw and carry cash. However, in case someone needs cash for an emergency, the card enables users to get cash advances. Numerous other conveniences of having a credit card include using the card for making reservations, purchases or services rendered.

A secured credit card offers an ideal way to establish or improve credit scores, which are typically required when needing to apply for loans. By making monthly payments for goods or services, in the same way that one would if having a traditional credit card, you can learn how to create and stick to a budget.

Many secured credit cards don’t carry the same fees that are required by traditional cards so using them is not only convenient but less expensive.

Ensuring Good Credit

After applying for and acquiring the credit card, maintaining good credit means:

i. Paying off the balance monthly

ii. Paying more than the minimal monthly amount required

iii. Making payments on time

Get a Secured Credit Card Today

Regardless of your current financial situation we can help. To find out more about secured credit cards, and even to apply for a secured credit card, click on this link for the application form. If you are experiencing financial problems, contact Ira Smith Trustee & Receiver Inc. We are a licensed trustee and will listen to your issues and provide compassionate, professional assistance to assist you to avoid bankruptcy.

We will explore alternatives to bankruptcy, such as debt consolidation, credit counselling and consumer proposals. Starting Over, Starting Now, we will assist you to regain your financial health.

Categories
Brandon Blog Post

WHAT IS A SECURED CREDIT CARD CANADA & HOW TO GET ONE

secured credit card, secured credit cards, prepaid credit card, prepaid credit cards, credit bureaus, credit history, bad credit, bankruptcy, consumer proposals, Vaughan, WoodbridgeIn our last blog “How to Fix Bad Credit”, one of the points that we touched upon was the use of a secured credit card to help you build a good credit history. Since the blog was published we’ve had several inquiries about secured credit card offers and how to get one.

What is a secured credit card? Secured credit cards require you to leave a deposit with the credit card issuer as a guarantee. The deposit is usually equivalent to the card limit, but it can be higher. The advantage of a secured credit card is that individuals with no credit history or a history of bad credit have the opportunity to build a positive credit history because most companies report regularly to the major credit bureaus. You can use your secured credit card in the same way as you would use any credit card. Be diligent and pay the balance regularly!

What is the difference between a secured credit card and a prepaid credit card? A secured credit card gives you a credit limit. A prepaid credit card works like a debit card; you have to keep reloading it with your own money. In addition, prepaid credit cards don’t give you the chance to build a credit history because no payment information is reported to the major credit bureaus. So, when you receive those secured credit card offers and prepaid credit card offers, you should know the difference between the two.

How do I qualify for a secured credit card? Most people will qualify for a secured credit card because you deposit the funds to secure the card in advance.

Can I get a secure credit card if I’m in bankruptcy or in a consumer proposal? In most cases, a secured credit card Canada is available as soon as are fully discharged from your bankruptcy. If you are in a consumer proposal, once it has been accepted by your creditors, you are eligible to apply for a secured credit card, but not necessarily guaranteed to be accepted.

Are all secured credit cards the same? No, not all secured credit cards are the same. According to the North Shore Advisory Inc., here are some precautions you should take when looking for a secured card:

  • Be cautious about secured card offers from unknown institutions. If you have doubts about the integrity of a secured credit card offer, contact FCAC toll-free at 1-866-461-3222.
  • Beware of secured card offers from issuers outside Canada. If you have problems, it may be difficult to resolve them if the company is not located in Canada.
  • Avoid offers for secured cards that do not have a recognized brand name such as VISA, MasterCard or American Express. These cards may only be accepted at a small number of stores or may require you to make purchases from a specific catalogue.
  • Read and make sure you understand all the terms and conditions associated with a secured card before you accept it.

How can I apply for a secured credit card from a reputable and recognized brand? For information on a Home Trust Secured Visa* Card click here.

Contact Ira Smith Trustee & Receiver for more information on secured credit cards and for professional advice on insolvency, bankruptcy and managing debt. You can live a debt free life Starting Over, Starting Now.

Categories
Brandon Blog Post

HOW TO FIX BAD CREDIT- READ NOW TO FIND OUT HOW

bad credit, credit repair, credit report, fix bad credit, how to fix bad credit, secured credit card, secured credit cards, canada loan scam, no upfront fee loans for bad credit, bad credit loans guaranteed approval $5,000If like many Canadians you’ve had some financial difficulties, you may now have the additional problem of having to deal with how to fix bad credit. The most important thing to remember is that there is no quick fix for bad credit. Beware of credit repair scams or Canada loan scams; they do not work. Watch out for promises like “bad credit loans guaranteed approval $5000” or “no upfront fee loans for bad credit”.

If you are having trouble paying your bills on time, contact your creditors or seek professional help from a licensed trustee. Stay away from credit repair scams.You are the only one who can fix your credit and it takes time. Here are some tips on how to fix bad credit.

  • Check your credit report – You are entitled to receive a free copy of your credit report annually from each of Canada’s two credit rating agencies, Equifax and TransUnion. Check your credit report annually for errors and get them corrected as soon as possible.
  • Pay the minimum payments on time and in full as required by the signed agreement you have with your creditors.
  • Apply for a secured credit card. Secured credit cards require you to leave a deposit with the credit card issuer as a guarantee. The deposit is usually equivalent to the card limit, but it can be higher. Build a good credit history by paying the balance regularly; then you can ask that the security requirement be dropped and that the deposit be returned. This is an excellent and simple way to start to fix bad credit
  • Do not apply for too many credit and loan products. Having too much credit can also negatively affect your credit report. Keep your available credit at a minimum. Do not fill in too many applications for credit and loans because every time you do, your credit history is checked. Too many credit checks can negatively affect your credit score.
  • Maintain your employment and residence for at least 2 years.
  • Do not fall victim to Canada loan scams.

Contact Ira Smith Trustee & Receiver for more information on how to fix bad credit or to book an appointment. Starting Over, Starting Now you can live a debt free life.

Call a Trustee Now!