Looking To Rebuild Your Credit? Here’s Why The Capital One Guaranteed Secured Mastercard Is Still My Top Recommendation

Your credit score is a number that falls between 300 and 900. This number is essential as lenders typically look at your credit score to determine whether they should lend you funds. Simply put, the higher your credit score, the more creditworthy you are.

Generally, credit scores fall in the following ranges:

• 300 to 579: Poor
• 580 to 669: Fair
• 670 to 739: Good
• 740 to 799: Very good
• 800 to 900: Excellent

Generally speaking, once you’re in very good or higher standing with your credit, you’re considered very trustworthy, so you’ll get access to better interest rates and terms.

The Capital One Guaranteed Secured Mastercard is a regular credit card, but it requires a security deposit that acts as your credit limit. For example, if you deposit $1,000 to your secured card, your credit limit would be $1,000. Although you can’t use those funds to pay off your balance, you will get the money back when you close your account.

The secured funds are required as they act like collateral and show that you’re serious about rebuilding your credit. Capital One will report your credit history to the credit bureaus as you make regular purchases and pay your bills on time. Over time, your credit score will increase. Once you have a good enough credit score, you can apply for traditional credit cards with a greater chance of being approved.

One of the main reasons I recommend the Capital One Guaranteed Secured Mastercard is because Capital One is a well-recognized brand in Canada. They entered the market in 1996, so they’ve been helping Canada for nearly three decades. It’s fair to say they know a lot about Canadian credit trends.

While some newer fintech companies offer credit-building services, I hesitate to recommend them. People looking to rebuild their credit typically want to work with a recognized brand. Whether fair or not, they don’t want to work with a company new to the game.

As the name implies, you’re guaranteed to be approved as long as you meet the four following criteria:

• You’re at least the age of majority in your province or territory where you reside
• You don’t have a frozen credit profile, and you’re legally allowed to have access to credit
• You don’t have an existing Capital One account or a pending application
• You haven’t applied for a Capital One account more than once in the last 30 days, haven’t had a Capital One account that was not in good standing in the previous year

What I love about the Capital One Guaranteed Secured Mastercard is that it has no annual fee. This may seem trivial, but some of the credit-building products I’ve seen come online recently charge monthly fees of up to $10.

Paying a monthly or yearly fee to rebuild your credit seems unnecessary when you can get a guaranteed card from Capital One with no fees at all. While it’s true that some of the credit building products don’t require a security deposit like Capital One does, you’re still paying for a service that is available for free.

It’s also worth mentioning that if you ever come across an ad for a service or person that claims they can fix your credit quickly for a fee, it’s probably a scam. Rebuilding your credit takes time. There’s no quick fix.

For a no-annual-fee card, the Capital One Guaranteed Secured Mastercard gives you a surprising number of benefits, such as:

• Purchase assurance: Any purchases charged to your card are covered for 120 days from the time of purchase if the item is lost, stolen or damaged.
• Extended warranty: When you charge the total cost of your purchases to your Capital One Guaranteed Secured Mastercard, the manufacturer’s warranty is doubled, up to two years.
• Car rental collision/loss damage waiver insurance: When you rent a car and charge the total amount to your card, plus waive the rental company’s insurance, you’re covered if your vehicle is damaged or stolen for up to 31 days.
• Price protection: If any purchases you’ve made with your card go on sale within 60 days of purchase, you’ll be refunded the difference up to $100 per item and $500 per calendar year.

When rebuilding your credit, there’s no quick fix. Your best bet is to use a product with a proven track record, such as the Capital One Guaranteed Secured Mastercard. As you make payments, your credit score will slowly increase. At the same time, make sure you take the time to educate yourself about responsible credit card use so you don’t dig yourself into a debt trap again.