Good debt vs bad debt

Good debt vs bad debt -

We all have debts each and every month. But there are debts that work towards a healthy financial future, and debts that hold you back and erode your credit rating.

Let’s explore good debt vs bad debt.

Bad Debt.
This would be something like a credit card balance that keeps rolling over month after month. You may be just covering the minimum balance. Even as you hit click on your online payment or drop that cheque in the mail, over the long run, this type of debt is frowned upon by the credit rating powers that be. By not paying off those credit card balances, it tells potential lenders you are maxed out on debt, and not capable of handling further debt.

Buying what you need vs what you want.
Borrowing to buy a new piece of electronics, or cell phone is definitely debt that needs to be questioned. You should always ask yourself, “Do I really need this? How will this purchase improve my financial situation?”

Good Debt.
You’re starting a new job. It’s a job with great potential but unfortunately it’s not convenient to transit and arriving on time each day to work. You decide to borrow to buy a car. This is good debt. You’re investing in your future. Now, however, if you buy a car that is too expensive for your budget, you’ve shifted back into bad debt.

Investing in your Future.
Real Estate. Buying a home that matches your budget and doesn’t make you “house poor” is good debt. You have looked at your city, and purchased in an area that is on the rise. By and large real estate is almost always a good investment, but you need to not buy over your head. A property that is not properly maintained will end up becoming much more of a financial drain should you eventually wish to resell or rent that property out. But, just with the example of buying a car you can afford, buying a home within your budget is definitely smart investing and falls under the category of Good Debt.

Borrowing to purchase a new set of clothes for job interviews is an example of good debt and investing in your future. Designer labels or clothes that are priced way beyond your budget aren’t necessary and the return on that investment is questionable.

Borrowing to take classes which would increase the likelihood of being considered for a job is definitely another example of forward thinking good debt. But have a plan in place. Choose classes that will make you a more sought after candidate; classes that all weave together as a program that says you have an area of expertise which can be used in the marketplace.

Good debt is common sense debt.
We all know, deep down, whether a purchase is frivolous or a logical place to spend your money. Anytime you can borrow at a lower interest rate to pay off higher rate debt, it’s considered good debt. Any purchase requiring debt that can help improve your financial situation should definitely be considered good debt.

Often a loan will free up money that can be used to make a good debt purchase. The equity you have in your car or truck could pave the way to a brighter future.

If you are looking to get approved for a loan with bad credit, Prudent Financial can help. We provide funding to those in consumer proposals and even undischarged bankrupts.
Call about a BorrowWithYourCar loan or a consultation on your debt situation today at 1-888-852-7647.

Control Credit Card Spending During the Holidays

Avoid Using Your Credit Cards During the Holidays


Yes, the holiday season is almost here. That means it’s nearly time for the excitement, stress, rush and busyness of the season. It also means that it’s nearing the time of year where a lot of people spend a lot of money on parties, gifts, décor and much, much more.

Unfortunately, it’s easy to wind up in debt trouble during the holiday season. It’s even easier when you’re using your credit card.

credit card

Holiday Spending & Credit Card Debt

One major reason that people wind up in debt when using their credit card during the holidays is that they lose track of how much they’ve spent. You likely only receive your credit card statement once a month so, unless you’re very good at keeping tabs of your spending or you’re checking your balance online on a regular basis, it’s very easy to forget about how much you’ve spent. You will likely make many more purchases over the holidays than usual so it can become even harder to keep track of them all. Even a series of small purchases can quickly add up to a lot of money.

Since the purchases made on your credit card don’t come out of your bank account until after you’ve paid the bill, it’s often difficult to budget as well. This can result in being unable to pay your credit card bill in full when you receive it. This means you’ll end up carrying a balance and carrying a balance on a credit card can be very costly.

Most credit cards have very high interest rates. Even if you only carry a balance for a few months after your holiday spending is done, you’re still going to end up spending a lot of money on interest. This is money that you don’t need to spend and that you can avoid spending if you’re careful.

Another reason to avoid credit card usage over the holidays is that it can lead to impulse spending. Since the money isn’t coming directly out of your bank when you spend it, some people are less concerned with how much they’re spending. This can get you into trouble.

Avoiding Holiday Debt

Rather than placing all of your holiday spending on a credit card, make a plan earlier in the year to put some money aside each month for holiday spending. Then you’ll be able to spend cash rather than charging all of your purchases. It’s also very important that you set a spending budget before you head out on a holiday shopping spree and that you stick to this budget. Making an itemized list of what you need and how much it will cost before you start shopping is incredibly helpful and it can keep you from turning to your credit cards when you need to make a purchase.

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How to Choose a Lender for Bad Credit Vehicle Title Loan in Ontario

Choosing a Lender for Bad Credit Vehicle Title Loan in Ontario

Much like with just about anything, not all vehicle title loan companies are created equal. Each company has its own policies and its own way of doing things. You have to be careful not to assume that all bad credit vehicle title loan companies operate in the same way. They do not.

So how do you choose the right bad credit car loan company? Here are a few tips to help you out.

Reporting to Credit Bureaus

One of the most important aspects to consider is whether or not the lender reports to the major credit bureaus. Successfully paying off a vehicle title loan can help improve your credit rating. Credit agencies want to see that you are able to borrow money and pay it back on time. However, you’ll only receive this benefit if the lender reports your activity to the major credit bureaus. If they don’t, the credit bureaus won’t find out about the payments that you make and you won’t be able to improve your credit rating by getting a car title loan. Not all lenders report to all of the major credit bureaus, do so don’t assume that this is the case. Always ask.

Interest Rates, Charges, Fees & Terms

You will also want to pay attention to the interest rate that you are being charged. Obviously, a lower interest rate is generally preferable. However, you will also need to focus on the other terms of the loan. Again, don’t assume that all car title loan companies offer the same terms. Read the interest rate documents and the terms closely. Pay attention to any upfront fees and other charges that may be listed in the documents as well.

Is there any Payment Flexibility or Additional Payment Options?

What happens if you are unable to make a payment? What happens if you have some extra money and want to make a larger payment or an early payment? Different companies have different policies regarding these situations. It’s important that you find out this information before you accept the loan.

The Reputation of the Company

It’s also important to consider the reputation of the lender. How long has the company been in business? How many loans do they offer? Are they a trustworthy company to deal with? All of these considerations are important when choosing a bad credit vehicle title loan company. You’ll want to deal with a company that is stable, straightforward and a company that you can trust.

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How Car Title Loans Can Help You Repair Bad Credit

thinking to buy a carIf you have bad credit, you might be wondering about how you can repair your credit rating. Having a good credit rating is important as it allows you access to better loans and lower interest rates. But how do you repair your credit rating once you have bad credit?

One good way to do this is with a car title loan.

How Can a Car Title Loan Help You Repair Your Credit Rating?

A car title loan is a good loan to get, since it is a secured loan. Since the loan uses your vehicle as collateral, a credit check usually isn’t required. This means that, even if you have bad credit, you should be able to get a car title loan, as long as you own a vehicle.

Before you get a car title loan, make sure to find out if the lender reports to the major credit bureaus. This is important.

Once you’ve received the loan, all you need to do is make your payments on time and get your loan discharged once you’ve paid it off. Since the lender reports to the credit bureaus, they’ll find out that you were able to handle the loan and pay it back on time.

This allows you to establish a history of successful loan repayment, which will improve your credit rating.

Lenders like to see that you have been able to pay back loans in the past. Doing so increases the likelihood of you being able to pay back your next loan and it decreases the risk for the lender. This improves your credit rating.

Important Points to Remember

It’s important that you do not miss any payments during the term of the loan. The only way that you will be able to improve your credit history with a car title loan is by making all of your payments on time. If you miss a payment, you could end up hurting your credit rating even more.

You will also want to check and make sure that the property description status has been discharged once the loan is done. This will show that you are actually done paying the loan and that the vehicle is once again in your name.

Having an official document that states that you have paid off your loan in full will also help improve your credit rating.

Remember, it can often take time to repair a damaged credit rating. You will need to prove that you are able to handle paying back a loan and rebuilding this trust can’t be done overnight. Getting a car title loan is a good start.



Use the equity in your car to borrow money now.

Many of us have cars.  And many of us find ourselves in a situation where we need money quickly.  There are a few choices:

  1. Go to a bank.  However if, for whatever reason you find your credit score is a bit lower than what the bank is comfortable with this may not be an option.
  2. Go to a pay day loan type company.  We highly recommend against this option.  The pay back times are very short and the fees are extremely high if you are not able to pay back in the short times agreed on.
  3. is owned by Prudent Financial.  BWYC is a company that specializes in helping people borrow using the equity in their car.  If you need money for a short time, you can pay off the loan early.  And all your positive loan payments are reported to the credit bureau, which goes towards your total credit history and can eventually lead to a better credit rating. Prudent Financial has been lending money to people with lower credit scores since 1984.  Their rates for lower credit lending are the lowest in the GTA. Need some money quickly and still want reasonable rates and pay back periods?   Call or click to   and Think Smart.  Think Prudent.

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Bad Credit Warning Signs

Home Equity Loans

Bad Credit Warning Signs — that you must know!

A bad credit score can negatively affect many different aspects of your life. It can make it more difficult to get a loan, buy a car, rent a home and even to get a job. It can cause lenders to avoid lending to you or to charge you higher interest rates on loans. If you have bad credit, rebuilding your credit score can be time consuming and confusing.

For these reasons, it’s important to keep an eye on your credit score and to make sure that it stays healthy. In order to do that, you’ll need to know what can cause a negative impact on your credit score and take steps to avoid those situations.

Here are a few signs that you may have bad credit and what you can do if you’re in one of these situations.

You Haven’t Seen Your Credit Report

It’s important to review your credit report regularly. Everyone should review their credit report at least once a year. Not only is it important to know what’s on your credit report, but you should also check your report for errors or inaccuracies.

There are two national credit bureaus in Canada: Equifax Canada and TransUnion Canada. You should check your credit report with both of them.

You’re Not Paying Attention to your Credit Limit

If you don’t know how much credit you have, you can’t possibly use it responsibly. You might even end up going over your credit limit without knowing it.

Find out how much credit you have available to you and take steps to better control how much you spend. Your “credit utilization rate” is the amount of credit that you have compared to the amount that you are using. Most lenders want your credit utilization rate to be under 30%. This means that if you have $10000 in credit available, for example, that your outstanding balance should be $3000 or less.

You Don’t Have Enough Credit

If you don’t have much of a credit history, lenders may be hesitant to trust you. This probably affects younger people more often, but it can be a problem for just about anyone who doesn’t use credit frequently. Not having enough credit can make it difficult for you to get credit which makes it difficult for you to build your credit score and so on and so on.

What can you do in this situation? Get a secured credit card. These cards require a cash deposit as collateral, but all activities that take place on a secured credit card are reported to the major credit bureaus, which helps you build your credit. Once you’ve shown that you can regularly and responsibly use credit, you’ll be able to get a new credit card and other types of credit in the future.

You Have Too Much Credit

Having a large number of credit cards can be a problem. Not only can it cause you to lose track of exactly how much you owe on each card, but it can also lead to high debt and missed payments. All of these things are bad for your credit rating.

To solve this problem, assess your situation, consider closing some unused cards and come up with a strategy for paying down the debts on the remaining cards.

You Only Use Credit Cards

It’s important to have a good mix of credit, not just credit cards. You obviously shouldn’t take out a loan if you don’t need it or can’t pay it back, but if you do need a loan and you can pay it back on time, it will benefit your credit score.

You’ve Missed Payments

Payment history is a big factor in calculating your credit score. Even missing one payment can cause damage.

You can avoid missed payments by setting up automatic payments or by creating reminders in your calendar or phone to make payments before they are overdue. If you’re having difficulty making your payments, set up a budget that allows you to meet all of your financial obligations and stick to it. You may have to cut your other spending in order to make payments on time.