Your credit rating is like a report card. Having money problems, filing personal bankruptcy or making a consumer proposal will result in a bad mark on your credit report card. Therefore to rebuild your credit rating you have to get as many good marks as possible. The only way to get a good mark is to borrow money and pay it back within the time restrictions. The way to get a bank or credit card company to lend you money despite your poor credit rating is to:
- Use a co-signer
- Get a secure credit card
What are the Risks of Using a Co-Signer?
- You and the co-signer become jointly liable for 100% of the debt
- If you are unable to make payments, the co-signers will have to maintain the payments or their credit rating will be affected.
What are the differences between a cash card and a secured credit card?
Cash cards/Pre-paid credit cards
- Do not involve credit and don’t improve your credit rating
- You deposit money into a “credit account” which is used to make purchases and must be refilled
- No monthly statements
- Offered by payday-loan companies
Secured credit cards
- Involve credit and help to improve your credit rating
- Money is deposited with a bank or credit card company and held as collateral
- You will receive regular monthly statements and be required to make payments
- Offered by banks and other credit card companies
