Six steps to restore credit rating after bankruptcy.
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After bankruptcy, restoring your credit can seem like a daunting task. However, it’s easier task than you think. Here are six steps to rebuild your credit quickly and simply.
1. Complete your bankruptcy as soon as possible
The first step in restoring your credit rating is to complete your bankruptcy as quickly as possible. If this is the first time you go bankrupt and you do not have excess income, you could be automatically released from bankruptcy after nine months.
Therefore, it is important to make all your monthly payments on time and to attend both phases of consultations in order to be eligible for an automatic discharge from your bankruptcy.
2. Start saving and make a budget
The next step is to get a savings account and make regular savings deposits. This is an important step since banks will be more likely to lend you money if you have collateral. Saving money will also help you make payments if you find yourself facing unexpected financial problems. Following a budget will help you manage your money appropriately and help you determine how much money you can save.
3. Pay your bills on time
In order to restore your credit rating diligently, the easiest and most effective way to do this is to pay all your bills on time. If you wait too long before making your payments, your credit will deteriorate. These bills include, but are not limited to, telephone bills. If you have a contract cell phone, your payment habits will be visible at credit bureaus.
4. Correct any errors that appear in your credit report
In order to restore your credit, it is important to obtain a copy of your credit report so that you can correct the errors in it, such as the debts that should have been included in your bankruptcy. If you find any errors in your credit report, you should contact the credit bureau as soon as possible to remedy the situation.
Once released from your bankruptcy, your trustee will forward the details of your discharge to the Office of the Superintendent of Bankruptcy and then contact the credit bureaus to inform them. Please note that your trustee can not contact the credit bureaus directly. However, there is nothing stopping you from forwarding a copy of your clearance certificate to credit bureaus, although this is not usually necessary.
5. Get a credit card guarantee
A secured credit card is a good way to rebuild your credit. To be in possession of a secured credit card, you will need to have a savings account since it is this account that guarantees the card. The credit limit, therefore, depends on the amount of money that guarantees the card.
A credit card guarantee will appear on your credit report as a normal credit card. So, not only is it secure and easy, but it is also a surefire way to restore your credit. Make sure to keep your card balance down and pay your balance in full each month.
6. Contribute to an RRSP (Registered Retirement Savings Plan)
If you have enough money to invest, it would be a good idea to open an RRSP account. If you invest regularly in an RRSP, the bank will probably be more likely to make a loan in the future. In addition, every dollar contributed to your RRSP will give you the right to a tax refund at the end of the year. For example, if you have $ 30,000 a year and you contribute $ 2,000 to an RRSP, you will get a $ 570 tax refund.
After your bankruptcy, follow these 6 wise tips and your credit rating will recover as quickly as possible.