After Bankruptcy Credit Repair

How To Begin Repairing Credit After Bankruptcy

Filing for bankruptcy in Canada is a significant decision that you won’t have taken lightly.

However, once it has been established that this is the best way to support your long-term financial health, it’s vital that the next steps are positive.

Credit repair should be top of the agenda.

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Why You Need To Focus On Credit Repair After Bankruptcy

When you find yourself drowning in debt, filing for bankruptcy in Canada may be the most appropriate solution.

However, it will impact your credit rating for several years.

Failure to address this with a conscious effort to rebuild your credit score will prolong the restrictions placed on your future finances.

Therefore, it’s imperative that you regain control of the situation ASAP.

The purpose of rebuilding your credit score is to show potential future lenders that you are considered a good candidate that poses less of a risk.

This unlocks a variety of rewarding features, including but not limited to:


  • Be offered more types of credit agreement in the future;
  • Avoid the need for guarantors and co-signers on future credit agreement;
  • Gain offers for better terms and lower interest rates;
  • Become pre-approved for smaller credit agreements;
  • Regain the opportunity to buy a home or other major assets.


Unfortunately, if you follow the same habits as you did prior to your bankruptcy, the same outcomes are inevitable.

Credit Repair Strategies After Bankruptcy

Incentivizing yourself to learn from past mistakes is one thing, but doing it is another.

Given that your credit rating is more vulnerable than ever, even a single mistake could cause significant further damage.

Therefore, you must implement a detailed and comprehensive strategy.

While each of the following ideas are simple on their own, their cumulative effect will go a long way to rebuilding your credit history to achieve significant improvements.

Pay Bills On Time

Bankruptcy allows you to start a fresh new chapter free from the burden of unsecured debts and lines of credit.

However, you will still need to meet secured credit repayments as well as ongoing bills for living costs.

The latter includes everything from rental payments to groceries or utilities.

Using automated payment to ensure that all payments are made on time will slowly but surely rebuild your credit.

Crucially, it will also prevent further declines caused by poor organizational skills.

Spend Less

Simple economics state that debts grow when you spend more than you earn.

Therefore, you need to ensure that outgoings are less than your revenue.

You can do this by getting a better job or trimming the fat from your monthly spending, either through cutting down on luxuries or negotiating better deals.

It’s important to track your spending.

Whether using an App or the traditional pen and paper approach is a matter of personal preference.

The key is to know exactly where your finances stand at all times.

Use Credit Wisely

Nobody wants to fall back into credit card debt, but there is an alternative.

A prepaid credit card, otherwise known as a secured credit card, allows you to pay a deposit in advance.

You then use the credit card, as usual, to rebuild your credit card with making the monthly repayments.

Lenders aren’t at risk as your credit card is secured by the deposit while you get to rebuild your credit without fear of falling into debt.

Credit score agencies view this card in the same way as any other credit card.

Start Saving

Credit availability following bankruptcy will be limited for several years.

As such, it’s vital that you build an emergency fund for unforeseen circumstances.

Otherwise, an unexpected expense could quickly lead you back into the vicious cycle you were previously trapped in.

As well as traditional savings, you may want to look at the idea of using a small RRSP loan, which works on the idea of borrowing money to save money by topping up your registered retirement savings plan.

What Else Should Be Done During The Post-Bankruptcy Repair?

Rebuilding your credit score and securing a better cash flow aren’t the only vital aspects to consider during the post-bankruptcy period.

It’s essential to familiarize yourself with the restrictions in place while also learning about the terms of bankruptcy discharge and bankruptcy registrations.

The post-bankruptcy period is a time of uncertainty, especially if you aren’t organized.

Therefore, the best thing to do is seek further advice from an impartial expert.

Bankruptcy Canada can support you through every step of the process, from bankruptcy filing to the subsequent credit recovery.

Give us a call on (877) 879-4770 to learn more.

Canadian Bankruptcies

How to File for Bankruptcy
What is Bankruptcy?
Bankruptcy FAQs
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?

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