Canadians are vitally concerned with their credit ratings. Almost every person, I met in my practice wanted to know how the bankruptcy would affect their credit rating.
I would say that most people, thought the bankruptcy would hurt their credit rating.
I will show you the quickest way to get a great credit rating after Bankruptcy or Consumer Proposal
Many people also think that a non-profit credit counsellor would be the best for doing less harm to their credit rating and would allow them to get their good credit rating back the most quickly. This is not true!
Here are the facts about getting a great credit rating after Bankruptcy or Consumer Proposal:
- People who see a trustee about bankruptcy, in almost all cases, have such a bad credit rating that the best and smartest thing for them to do is start fresh to re-establish their credit rating. Starting fresh gives you an outstanding advantage in seeking credit.That is that you do not have any debt so actually are a good credit prospect for lenders;
- Using a credit counsellor, whether non-profit or not, will NOT get you a better credit rating and will usually end up with you taking longer to get your credit rating back than filing bankruptcy.
More facts about getting a great credit rating after Bankruptcy or Consumer Proposal:
- A consumer proposal will attract an R7 rating;
- Using a credit counsellor will attract an R7 rating;
- A bankruptcy will attract an R9.
None of these will help your credit rating.
A consumer proposal or a bankruptcy filing does indicate you are dealing with your credit problems.
You can start to rebuild your credit as soon as you are discharged from bankruptcy or have completed your consumer proposal and can expect to have rebuilt your credit in about 2 years. Please refer to this article, which will walk you through how to get back an excellent credit rating in approximately.
Another factor is that the record of your bankruptcy on your credit report will be removed 6 years after your discharge.
Most bankrupts are discharged after 9 months. The record of your consumer proposal is removed 3 years after the completion of the consumer proposal.
A consumer proposal will be completed, usually, in 3 to 5 years.
So, what is the answer to the question: “What is the quickest way to get a great credit rating after Bankruptcy or Consumer Proposal?”
It is this writer’s view that a bankruptcy will give you an excellent credit rating in the quickest time.
Firstly when you are discharged from bankruptcy, usually in 9 months you can immediately start to rebuild your credit rating.
This gives you a head start over a consumer proposal or using a credit counsellor of say (5 years, to complete the consumer proposal or credit counsellor plan, less nine months to complete the bankruptcy) or a head start of 4 years and 3 months.
Coming out of bankruptcy should have you with an excellent credit rating in about two years.