Credit Repair after Bankruptcy
After filing for bankruptcy, you have to begin the arduous task of repairing your credit rating.
If you don’t, then it will be impossible to apply for any loans or credit when you need it.
So, you can wave goodbye to a new car or house!
Thankfully, credit repair after bankruptcy doesn’t need to be that challenging.
We’ve outlined some vital tips to follow to build your credit as quickly as possible:
Get discharged as quickly as possible
The earliest you can be discharged from bankruptcy is nine months after completion.
To qualify for this, you need to maintain monthly payments and reports to your Licensed Insolvency Trustee.
You’ll also need to go to credit counselling meetings.
Keep up with all of this, and you can get your bankruptcy wiped from your credit report after just nine months.
Check your credit report
Following this, you should get a copy of your credit report and check it thoroughly.
Sometimes, there may be debts on the report from before your bankruptcy.
Don’t worry, this is an error and you can get it sorted right away.
Flag it up with whoever you got your credit report from – there are multiple places online to get a report.
Now, you should have a clean slate to start building credit on.
Set up direct debits for your bills
Direct debits ensure that you don’t forget to pay your bills on time.
This is a crucial step in credit repair after bankruptcy.
It shows that you are responsible and have the money to pay for things.
Month after month, your credit will build back up.
Apply for a credit card
It will be hard to get a credit card when you’ve been bankrupt, but not impossible.
Secured credit cards exist for people with little to no credit.
You make an initial payment that acts as security against the card.
Think of it as a deposit to ensure you pay on time.
From here, you should use your card to build credit.
Keep the balance low – maybe set up one direct debit from the card per month.
Pay the entire balance when its due, and you will begin to regain your credit score by proving you can borrow money and pay it back.
Saving money is one of the best ways to improve your credit after bankruptcy.
Put some money aside each month into a savings account.
This money can be used to save towards a mortgage downpayment, or it can help pay for bills in emergencies.
It’s also a smart idea to invest some of your savings in an RRSP.
The benefit of an RRSP is that the bank will usually match your deposit in the form of a loan.
Then, when tax time comes around, the amount you’ve contributed can provide a tax refund.
Why is this good?
Because the refund can almost be enough to pay off the loan to the bank, showing that you have paid a debt.
This is excellent for your credit rating.
If you need any help with credit repair after bankruptcy, then we can be of assistance.
As a Licensed Insolvency Trustee, we’ll happily provide as much advice as possible.
Feel free to contact us today or fill in a free evaluation form to learn more.