Here are some helpful steps you can take to start rebuilding or fixing your credit score in Canada after you’ve been bankrupt:
- Pay Bills on Time
- Get a Cell Phone on Contract
- Get a Secured Credit Card
- Apply for a Small Amount of Credit
- Stick to a Monthly Budget
- Avoid NSF Fees and Overdraft
- Only Charge Your Credit Card With Money You Can Pay Back
- Avoid Getting Into Debt Again
Pay Bills On Time - Avoid Bad Credit from Late Payments
Pay all of your bills on time. Don’t underestimate how important it is to pay your regular bills, like hydro, gas, cable, internet, etc. on time every month. While paying these bills on time won't fix your credit directly, it will signal to lenders that you're managing your money effectively.
Cell Phone on Contract - Companies Report Your Status to Credit Bureaus
Apply for a cell phone on contract. The big companies will report your payment habits to the credit bureaus each month. Again, pay your bill in full and on time every month. When you act responsibly with your payments, it goes a long way to repair bad credit.
How a Secured Credit Card Can Help - Helpful Charge Card Strategy
Apply for a secured credit card. You will need to save up about $500 for the security deposit so that the credit card company can hold that money for up to 2 years. They will do this in case you don’t make your payments. Use your card for one or two small, planned purchases each month, wait for the bill to arrive and then pay it in full and on time. This will help to rebuild credit and clean up your credit history.
Limit How Often You Apply - Wait for at Least 6 Months Between Applications
Don’t apply for too much new credit. Every time you do, there will be a “hit” against your credit report. If you are declined once or twice, wait a minimum of 6 months before you apply again. The longer you wait, the better. This is just one factor in how your credit score is calculated or checked in Canada.
Live Within a Realistic Budget and Save for Unexpected Expenses
Have a monthly budget that lets you live within your means. You will need to set some savings aside for unexpected expenses. Make regular deposits to your savings account and manage your normal monthly expenses carefully.
Use Your Bank Account Responsibly - Avoid Overdraft and NSF Fees
Use your bank account responsibly and consistently. Overdrawing your account or writing NSF cheques is a sign of financial difficulty.
Avoid Credit and Loans You Can't Afford to Repay
Avoid using payday loans to make ends meet. They won't help improve your credit rating. If you find that your pay cheque isn't enough to make it to the end of the month, consider other options to help avoid ending up in financial difficulty again.
Avoid Ending Up in Debt Again - Make Smart Financial Choices
Part of rebuilding your credit after bankruptcy means learning new money habits. This can take time. If you notice that you are starting to get behind again, don’t wait until you’re maxed out before you get help.
Common Questions About Repairing Your Credit After Bankruptcy Discharge
- What is life like after bankruptcy?
- Can learning what steps to take to increase my credit score help me?
How to Get More Help - Deal with Debts and Rebuild Credit After Bankruptcy
If you’re thinking of declaring bankruptcy and aren’t sure if it’s the right option for you, please contact us for more help. We’ll be happy to answer your questions, debunk bankruptcy myths and provide you with information about how it can affect your credit. If you’ve already been discharged, we can help you find ways to rebuild and restore your credit after bankruptcy. We offer many different credit counselling services and can help. We're available by phone at 1-888-527-8999, by email or through our online chat.