Filing for bankruptcy provides you with the opportunity to resolve your debt and get back on the right track to a secure financial future. If you have recently declared bankruptcy or have been discharged of bankruptcy, you might be looking for opportunities to rebuild your credit score.
Below are some helpful tips to keep in mind:
Pay bills on time
Following, and even during, a bankruptcy, it is incredibly important to make sure that you are making owed payments on time, including utility bills such as phone, hydro, and Internet. As well, paying all living expenses on time, including rent and mortgage, will help you to rebuild your credit score.
Having a cell phone contract
If you have a cell phone contract it can be a great way to start rebuilding your credit score because major cell phone carriers report your payment habits and reliability to credit bureaus. Something as simple as paying your cell phone bill on time can go a long way to repairing your credit score after bankruptcy.
Using a secured credit card
Payments made to a secured credit card are reported regularly to major bureaus. Making small, planned purchases and paying on time will therefore help you to rebuild your credit score. A down payment is required to obtain a secured credit card, and the card company will generally hold the money as collateral for up to two years.
Don’t apply for too much new credit
Avoid applying for excessive credit immediately following bankruptcy. Every time you apply for new credit, your credit score will be affected. Often the longer that you wait to apply for new credit after bankruptcy, the better it will be for your credit score. Also remember not to apply for more credit then you need has having lots of credit (used or unused) does not improve your credit score and it also leaves a temptation to use credit you may not be able to afford.
Live within a budget
Create a monthly budget that incorporates all of your expenses and your income. Ensure you are saving money each month, and arrange your budget by pay period to ensure you make payments on time. Living within a budget will help to cut down on frivolous spending and help you to get the most out of each paycheck.
Rebuilding your credit score will help you to achieve financial independence following a bankruptcy procedure. Keeping the above tips in mind will ensure you are making the best choice for your financial future. Speak with a licensed insolvency trustee today to learn more about how you can regain control of your finances.
Check and Update The Credit Bureaus
There are 2 main credit bureaus for Ontario (Equifax and TransUnion) that keep track of the credit histories however they track a lot of information from a variety of sources and can often be out of date of inaccurate. You are entitled to order one free report from each credit bureau every year (if ordered by mail) so it is a good idea to use this system to make sure your credit history is up to date. If there is something inaccurate on a credit report if you send them a written request regarding the matter they are required to investigate and provide a written response. Please see our previously blog for more information: