Have a good credit rating.
To be successful with lenders, you must first and foremost use your credit responsibly and avoid late payments. Canada’s financial consumer agencies also advise you to own several credit instruments (card, line, personal loan) and to keep your credit accounts open for a long time. Thus, it is recommended not to close an old credit card, even if the balance is transferred to a new one.
We must also ensure that less than 35% of all available credit is used. In fact, the more we use a high percentage, the more lenders consider us at risk, even if we pay the balance in full when due.
In addition, requests for consultation of the credit file by lending organizations in a short period of time are also frowned upon. They give the impression that a person is in financial difficulty and is desperately looking for credit from different lenders, or an individual living beyond his means who does not have the capacity to repay the borrowed money!
Restoring your credit after bankruptcy
A personal bankruptcy marks a credit report with the hot iron and brings down the rating to the lowest. A first bankruptcy will remain on for six years in the files of ‘ Equifax , in those seven years of TransUnion . A second bankruptcy will remain on file for 14 years.
Certainly, bankruptcy makes lenders considerably cautious about us. But it is possible to gradually move up the slope, once released from bankruptcy, usually after nine months. “We can start by requesting a credit card with a guarantee, use it responsibly and make repayments when due,” explains Guylaine Fauteux. The principle of these cards, offered by most major issuers, is to deposit funds in advance which will constitute a guarantee for the lender. Once you have built a good payment history, you can request that the warranty be removed and continue to use the card reasonably.
“We also avoid making credit requests without a valid reason, because if the loan is refused, it remains in the file and can work against us”, points out Ms. Fauteux, who concludes however that in terms of credit after bankruptcy, only time and diligence can erase your past difficulties ”.
Change your habits
To improve your record, it is advisable to change your habits. Always try to pay your bills on time and try to keep your credit cards at 35% of their limit. Do not hesitate to consult the blog ” understand my credit score?”
To be vigilant
We tend not to worry too much about our credit report, but it is important to be vigilant because this file has a significant impact on our financial situation. Above all, don’t wait to report unauthorized transactions posted to your account!