How Credit Works | Refresh Financial

Good credit unlocks the door to yes!

It’s how you get access to the things you need, like:

A Mortgage


The job you want

Deposit-free utility accounts

Low financing for car leases

The best phone plans

Cash loans

A line of credit

A car loan

The lowest interest rates

Approval to rent apartments

A low-interest student line of credit

Can anyone get credit?

We all have a credit score — some good, some not so good (some are even zero!). The trick is that you need to have a good credit score in Canada to get access to credit. Credit allows you to reach your goals in a more flexible way. The trouble is, you need credit to build your credit score, but with a low credit score, no one will give you credit. It's a chicken and egg situation! Since building your credit score takes time and patience, now is the time to start building.

Your credit score is a number that affects you

Your credit score is a three digit number, that sums up your whole financial reputation. Think about it like a financial resume. This number is all about trust, and determines what type of credit you can get in Canada, from a mortgage all the way down to payday loans. Your credit score also decides what conditions (like a cosigner) and interest (high or low) you will get on any credit you apply for.

If you have a history of paying lenders on time and managing your debts responsibly, you’ll have a high credit score! If you don’t have a history at all, or if you have a low credit score — it is harder to get lenders to feel confident loaning money to you. Our goal is to help those with no credit score or a low credit score get back to bank interest rates.

Have you ever been denied for a credit card?

If you’ve been turned down for credit, don’t take it personally - even good people can have bad credit. It probably means your credit score was too low. Lenders do a lot of math to figure out the risk of not getting paid based on credit scores. Unfortunately, an awesome personality doesn’t count for much in the world of credit!

If you’ve ever been denied for credit, we can help you.

Building credit takes time

Revolving and installment credit

Revolving and installment credit are both important to your credit score. Having both on your credit report shows you can manage all kinds of credit responsibly. Here’s how they work.

Revolving credit:

  • Can be used repeatedly, once debt is paid off
  • Minimum payment varies, depending on balance owing
  • No set payment amount
  • Can repay full amount owing all at once or over time
  • Can be secured or unsecured
  • Higher interest than installment credit
  • Interest charged on unpaid balance every month
  • Example: a credit card or line of credit

Apply for the Refresh Secured Card.
No credit checks required!

Installment credit:

  • Fixed payment amounts over a set term
  • Can be secured (a car loan)
  • Can be unsecured (a cash loan)
  • Fixed borrowing amount and term
  • Paid off in regular installments
  • Easier to plan and budget for
  • Example: student loan, personal loan, car loan, mortgage

Apply for the Refresh Financial's Credit Builder Loan.

What’s the difference between secured and unsecured credit?

Credit can be offered as both secured and unsecured. Whether it’s secured or not, doesn’t actually affect your credit score. Here’s what you need to know about both.


Secured credit is credit that is given to buy something of value such as a house or a car. If you were to fail to make payments, the lender would repossess the item and be able to recoup some of their losses. It is possible for people with low credit scores to get secured credit, but it comes at high interest rates.

  • Security (collateral) can be a deposit, like cash
  • Collateral can also be item you're getting, like a home or car
  • If you don't pay (default), the lender takes your security as payment
  • Can be offered when you have poor credit, like a secured card
  • Can be hard to get, like a mortgage
  • Can be easy to get, like a secured card


Unsecured credit is credit that is given on the basis that the lender trusts you will pay it back. Your credit score indicates a history of repayments made, therefore it’s likely you will pay back the unsecured credit also. People with a low credit score will struggle to get unsecured credit.

  • Requires a good credit score
  • Have faster approvals and less paperwork
  • Can have a high-interest rate, as there is non security for lenders
  • Unsecured cash loans are harder to get than secured car loans
  • Used for cars, home renovations, education, and medical bills