How can I rebuild my credit after my bankruptcy in Saskatchewan is done?

Several factors will determine how quickly you rebuild credit after your bankruptcy in Saskatchewan is done and, in turn, your ability to borrow money.

If you are an undischarged bankrupt, it will be impossible to get a loan; however, if you have been discharged, a lender could take your application into consideration. Keep in mind that it will be harder in this case than if you have never been bankrupt before.

In addition to your application, lenders will want to look at your monthly income, how long you’ve lived at your current address, your work history, and whether you have enough security for the loan. In some cases a co-signor may be necessary.

Below are some suggestions for repairing your credit after bankruptcy.

Most importantly, save money! You were responsible for making a contribution to your bankruptcy estate, by paying the trustee a sum each month during the time you were bankrupt. Since you have now gotten used to living without that money, start putting money into a separate bank savings account each month.

Next, once you have saved up some cash in the bank for emergencies, you could use some of your savings to get a secured credit card. For example, if you give the credit card company $1,000 as a security deposit, they will probably give you a Visa card with a $1,000 limit. Your credit card works just like a regular credit card. It will even show up on your credit report! This is a crucial step to repairing your credit. More information on secured credit cards can be found here: http://www.moneyproblems.ca/SecuredVisa.htm

Third, as you continue to save money each month, (and pay off your new credit card in full every month), you could invest your next say $700 of savings in an RRSP. With a secured credit card and money already invested in an RRSP, it is possible that your bank will lend you an additional $500 to invest in your RRSP. You now have $1,200 in your RRSP, and your tax refund may increase by $500 because of your RRSP contribution. You can use your tax refund to repay your RRSP loan!

Now, your credit report shows a credit card in good standing, an RRSP loan that you have fully paid, and you have $1,200 in an RRSP. You are now well on your way to repairing your credit!

Finally, continue to save. Once you have another $1,000 or $1,500, you can likely use that money as the down payment on a car.

You can’t repair your credit right away, but if you continue to save money, and follow the steps listed above, you can gradually rebuild your credit after your bankruptcy in Saskatchewan in done.