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How to rebuild credit

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Rebuilding your credit

If you have been discharged from bankruptcy or otherwise have a poor credit score, you may be wondering how you can rebuild your credit. Lenders are often reluctant to provide people with poor credit in their records with any credit at all because they are concerned about your ability to pay. Here’s how you can rebuild your credit after a financial crisis:

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Get a secured credit card - Offered by most banks

You will need to come up with approximately $500 as a security deposit to have a secured credit card. Choose a card with no annual fees even though the first year’s fees may be waived. A credit card with at least $1,000 – $2,000 limit is ideal. Once you have the card:

  • Spend no more than 40% of that credit, while making regular and timely payments.
  • Use the card for incrementally increasing amounts and pay in full each time, on time.
  • Don’t use your credit card unless you can pay in full.
  • You may be able to have the deposit returned after you pay on time for the first 12 to 24 months.
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Limit how often you apply for a new credit card

Each time you apply for credit there is a “hit” against your credit report. If you are declined, you should consider waiting at least six months before you apply again. The longer you wait between credit applications, the better.

Keep existing credit cards

If you already have a credit card, then do not cancel it, as doing so can negatively impact your credit score.

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Ways to rebuild your credit

Take out a small loan that you repay

Achieving a good credit score doesn’t have to be hard, and rebuilding credit can happen if you follow these steps.

You can also work to rebuild your credit with a small loan, such as a car loan. Such loans are typically easier to obtain because they involve smaller amounts of money and are deemed lower risk than retail and credit cards because they provide for more basic needs. Setting up automatic monthly payments and overdraft protection can protect you from any missed or late payments, and will not drastically affect your credit score.

Avoid costly debt

Part of your strategy is to rebuild your credit by forming new habits. Avoid using payday loans and going into an overdraft. If you don’t have enough funds to pay your bills, consider other options to avoid more financial difficulty and to minimise the risk of a poor credit score.

Pay your bills on time

Never underestimate the importance of paying all your bills on time. While paying your bills isn’t an immediate process when rebuilding credit, it helps you to form good habits. If you can avoid paying interest on any personal loans or credit cards, you will create good credit habits and gradually improve your credit score. A useful method would be to create an automatic payment system to ensure there are no missed payments

Follow a budget and save

Following a monthly budget allows you to live within your means. In addition to managing your monthly expenses carefully, you should also put some savings aside for unexpected expenses.

Maintain steady employment

Income stability is important for managing your bill payments. In addition to your primary occupation, try to find more than one source of income (e.g., teaching kids, part-time business, renting out a room or taking on a boarder) as this can reduce your financial stress if you are out of work for some time.

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Support across Canada

Why Harris & Partners

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Remove up to 80% of your debt

Our Licensed Insolvency Trustees provide a customized service that could remove up to 80% of your debt and stress, so you can breathe easier.

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We speak your language

Our multilingual team provides support in many languages, from Farsi and Portuguese to Italian and Tamil, leaving out complicated jargon, so you understand everything, every step of the way.

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Debt support across nine provinces

Want to speak to someone in person? Our team is on hand to help at a Harris & Partners office near you.

Rebuild your credit with Harris & Partners

If you need help from those who specialize in helping rebuild credit, contact us at Harris & Partners Inc. Licensed Insolvency Trustee. In Canada, our federally Licensed Insolvency Trustees can help you achieve long-lasting financial solutions.

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Shahrad Nakhaie
Shahrad Nakhaie
2022-12-23
They are so great, every thing was so easy for me. Unbelievable, All my debt are gone now and I feel like I'm free, thanks Osman Ali for all you did for me, at the first time it's even hard to believe that was real, but it's real and easy. Thank you bro for your help.
Cody
Cody
2022-12-06
Osman is a professional and you cant find anybody better. He really cared about my situation and paid attention to every little detail so he can help me best. Thank you osman and the rest of the team for helping me through my struggles.
Banda Gueye
Banda Gueye
2022-10-29
Osman is a vert nice gentlemen, he was polite sweet and gentle. He really cared about my situation and paid attention to every little detail so he can help me best. Thank you Osman and the rest of the team for helping me through my struggles.
Kim Brown
Kim Brown
2022-08-29
So far this has been a great company, I have been with them over a year. Every time I have an issue Josh jumps right on it and helps me out. He never makes me feel like I'm being a pain in the butt 🙂 I definitely recommend them, I have referred two of my family members to get help and now Josh is helping them as well. I thank you Josh for all the hard work and responding so quickly to all my messages.⭐️⭐️⭐️⭐️⭐️
Ajanthan Murugananthan
Ajanthan Murugananthan
2022-04-28
Staff members Samuel and Josh were both amazing. Both very friendly, professional, and efficient. They took care of my credit card issues and line of credit and made it manageable. I would highly recommend Harris & Partners Inc. They have given me a new life in my financial life to success.
Paul Woo
Paul Woo
2022-03-01
Staff members Yasan and Josh were both amazing. Both very friendly, professional, and efficient. They took care of my credit card issues and made it manageable. I would highly recommend Harris & Partners Inc.