When a person declares bankruptcy or files a proposal, the Office of the Superintendent of Bankruptcy notifies the credit bureau. We are advised by the credit bureau that for first-time bankrupts, the information stays on your credit bureau report for 6 years (for a second-time bankrupt, it stays on your report for 14 years). A proposal is recorded for 3 years after the completion of your proposal.
After discharge, you can start to re-establish your credit by doing the following:
| 1. |
Talk to your banker and say you want to re-establish your credit rating. |
| 2. |
Open a savings account. |
| 3. |
Be a regular saver:
- Pay yourself first
- Take your next raise and save it
- Save 5 % of your pay
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| 4. |
Take out a small loan using the savings account as collateral, and then pay it back. |
| 5. |
Apply for a credit card with a low limit and secure the limit by using your savings account as collateral.
If you have difficulty getting a new credit card, you may want to apply for a "secured card" from your financial institution. A "secured card" is a card backed-up or secured by funds you have deposited with the bank or credit union. One Canadian financial institution that offers secured credit cards is:
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| 6. |
Do not apply for more than one or two credit cards. Each application for credit will show on your rating. Target one or two financial institutions.
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| 7. |
Pay your credit card balances on time. |
