Recovering from financial distress is a lot like recovering from a severe illness. After taking the necessary medication and fighting off the medical problem, you are probably still weak. You must slowly rebuild your strength, starting with small doses of exercise and gradually building up to your previous muscles.
Rebuilding credit is not that different. All that is necessary is for you to draw up a plan and stick to it. Add a little discipline, and you will be amazed as you once again become a credit-worthy person.
There are three basic steps to rebuild the credit and keep it up to the highest level.
- Your local credit bureau records your payment history from information provided by your creditors.
- Your local Banker: Your banker can help you reestablish your credit by offering you a secured credit card. Or you open an RRSP account with your banker at the branch. That small amount of monthly deposit does not matter. It is a record of consistent savings in that account. After six months of continuous assurance, you can ask your banker that give you an unsecured Visa or line of credit. From this, you will get two benefits. Your internal banking score will increase, and secondly, your credit bureau will show your good credit-paying history. This credit history will now be reflected on your credit report and available for anyone checking your credit to see.
- Departmental Credit Cards: Hopefully, after completing a proposal or bankruptcy, you will have learned how to manage credit properly and are ready to use credit cards carefully.
The first place to go for a new card is a department store or hardware store or Gas station etc. These merchants are more accessible than financial institutions to give a low-limit credit card to establish your new credit.
Conclusion: Rebuilding credit is a long process. You did not create a horrible history overnight. Do not expect to correct it instantly. Learn from the past mistake and do not repeat in future. You will then be in control of your financial life!