Secured Credit Card Canada
Credit Repair Guide for Post Bankrupts, Proposals & Debt Settlements!
Credit Score or Credit Repair is one of the areas of concern for majority of our clients. Questions like: What happens to my score after after I file for Bankruptcy? Can I rebuild my credit after Consumer Proposal? How do I rebuild my credit? Are just some of the most commonly asked.
In reality, rebuilding credit is not only possible but is also much easier than some might think.
Here are a few must do steps to ensure speedy recovery and positive results:
- Obtain a recent credit report. This can be done by calling or writing one of the overseeing bodies. Equifax Canada, Trans-Union and Exprian are some of the most popular credit bureaus in Canada. The fastest way to obtain the credit report is by the company’s website order. However, after Bankruptcy or Consumer Proposal not many people have access to a credit card, so calling the agencies would be a most viable option.
- Once the credit report is in hand, carefully review all the accounts and collections listed. If there are credit accounts that you don’t recognize or that show incorrect information mark them down and contact the credit agencies for instructions on how to remove the incorrect information.
- If you have filed for Bankruptcy, in the majority of cases you will receive a discharge in nine months. You will have to manually update your credit report, as it may take a while to happen on its own. Contact credit bureaus and fax them the Bankruptcy Discharge copy. In the case of Consumer Proposal, after your obligations are fulfilled, fax the fulfillment statement to the credit agencies for an update as well.
- Sixty days after faxing the documents and correct information, request another credit report.(Equifax Canada offers free credit reports if requested by mail).
- After you receive another copy, review it carefully and make sure all the accounts are updated to the Bankruptcy or Proposal status. If there are any incorrect account or credit that is not yours make sure to notify the agency and remove it from your report.
- At this stage, about four months has passed since the discharge or fulfillment of the proposal, your credit report has been updated, and it’s time to start working towards improving your credit score.
- The best and fastest way to show the lender that you’re financially responsible is to get a credit card. It may be hard to obtain an unsecured card; however, an approval for a secured card is almost guaranteed. Capital One, Home Trust, and Horizon are some of the best known companies to obtain the card from. From our experience Home Trust has the least stringent application process and the highest approval rates. (Click Here To Apply For Secured Home Trust Visa). If you send them a cheque for $ 500.00, they will issue you a credit card for $ 500.00. In some instances you may be able to get a secured card from your banking institution; however, they usually request 5 to 1 security amount. If you’d like the card for $ 500.00 they would ask for $ 2,500 as a secured deposit.
- After you’ve applied and received your credit card it is mandatory to keep it in good standing if you want to improve your credit score. Whenever possible, pay-off you monthly balance, and if not, make sure to pay a bit more than the actual minimum payment as well as pay it on time.
- In about a year of having the secured card, you can apply for a department store card. The amount of credit is actually not important, what’s important is that you make the payments on time and show the lenders that you’re financially responsible.
- At this point 14-24 months has passed from your discharge date, you can request another copy of the credit report, and this time it’s better to do it online. It is a paid service but it will give you a credit score power. You will be able to see your credit score and if everything was done correctly( the payments on the credit cards as well as any other account you might have obtained were never late) you should see a major improvement.
Although it will take 6 years for the Bankruptcy(if its a first bankruptcy) and 3 years for Consumer Proposal to come off your credit report, it is possible to rebuild one’s credit in 2-3 years.
This information is provided for general education purposes only. It does not constitute legal advice of any kind. Credit card companies offer variety of services that frequently change, we do not provide any guarantee for the accuracy of the stated information. We advise everyone to investigate every option for themselves and consult the credit agencies for additional information or clarification.