Low credit score in Canada: what to try with a job, and what to try without one
Quick summary
A low credit score is common, and it is not permanent. With a job, the usual order is to check your reports, ask a bank or credit union first, then use a secured card or credit builder to rebuild, and keep high-cost loans for last. Without a job, the first step is income and breathing room: benefits, a talk with your creditors, and free credit counselling, before you borrow. Check what any loan costs in total with the cost box in our lender comparison.
Checked November 10, 2026. Main source: Financial Consumer Agency of Canada: Payday loans (modified October 14, 2025, read November 3, 2026). See all 2 sources.
Key facts
- Payday loan, $300 for 14 days
- $42 in fees, about 365% a year
- Source: FCAC payday loans page
- Bank alternatives (line of credit, overdraft, small loans)
- Interest from just over prime to about 21%
- Source: Canadian Bankers Association
- Legal limit on interest
- 35% a year (the criminal interest rate)
- Source: FCAC payday loans page
First, a calm word
Needing money with a low score can feel awkward. Many people are in the same spot, and asking questions is how you avoid a bad deal. Nothing here depends on your score being fixed first.
If you have a job: try these in order
- 1. Read your own reports. Free reports are in our guide. Mistakes can be disputed. Fixing an error may help your score, but nobody can promise how much.
- 2. Ask the company you owe for more time. This costs nothing.
- 3. Ask your employer about a pay advance. This also costs nothing, and the FCAC lists it before a payday loan.
- 4. Ask your bank or credit union about a line of credit, overdraft or small loan. The CBA says these range from just over prime to about 21%, far below a payday loan.
- 5. Start rebuilding with a secured card or a credit builder. Compare costs first.
- 6. If payments already feel heavy, ask a non-profit credit counsellor to look at the whole picture.
- 7. Only then look at a high-cost installment loan, and run the numbers first.
Source: Canadian Bankers Association: Banks and alternatives to payday loans (no effective date shown, read November 10, 2026). Source: Financial Consumer Agency of Canada: Payday loans (modified October 14, 2025, read November 3, 2026). The order is our judgment.
If you do not have a job right now
A loan has to be repaid from income. Without it, a loan can add a payment you cannot make, so the first job is to get income and time.
- Check the benefits you may be able to claim. Some are worked out from your tax return, so filing may matter even with no income. Check each benefit's own page.
- Tell your creditors early. Some have hardship options. Ask what yours offers.
- Talk to a non-profit credit counsellor. It is free to start.
- If debts are beyond reach, learn what a consumer proposal does and does not do.
- Avoid payday and high-interest loans while you have no steady income. The cost box shows why.
Check what any loan will cost before you say yes
Enter the amount, the rate, the length and any fee on the offer. The total is the number to compare.
Loan cost box
You borrow $10,000 and repay $19,408 in total.
That is $323.47 a month. The interest alone is $9,408.
Every $1 you borrow costs $1.94 to repay. The cost of borrowing is $9,408.
Nothing you type here is saved or sent. These are estimates. Your lender's contract is the final word, and it may add fees or insurance.
Where hope comes from
A score is not a verdict. It changes as new on-time payments are added and older problems age. Each guide below says how long things stay on a report, and what you can do now.
Questions people ask
Can I get a loan with a low score in Canada?
Often, but the cost is higher. Lenders that serve people with low scores state rates up to 35% a year, which is the legal limit. Banks and credit unions may cost less if they approve you.
What is the cheapest option with a low score and a job?
Usually asking for more time, a pay advance from your employer, or a bank or credit union option. The CBA says bank alternatives range from just over prime to about 21%.
I have a low score and no job. What should I do first?
Look at benefits you may qualify for, tell your creditors, and talk to a free credit counsellor. Borrowing needs income to repay it.
Should I use a payday loan?
The FCAC says a $300 payday loan for 14 days costs $42 in fees, about 365% a year. Try cheaper options first.
How can I rebuild my credit?
Pay on time, check your reports, and consider a secured card or a credit builder. No product promises a result.