Preserve Your Rebuilt Credit
After being discharged from bankruptcy, most people work very hard to rebuild their credit. It’s awesome hearing stories of people who have learned from their past mistakes. It’s important to be vigilant when trying to rebuild your credit. Just one NSF (non-sufficient funds) cheque or automated withdrawal or a late/missed payment could be disastrous to your credit rating. Your non-bankrupt friends and family might be able to get away with it, but not you! Of course, no NSF transaction or late/missed payment goes unpunished. But when you’re recovering from bankruptcy, it’s far worse to have one of those on your credit report than for other Canadian consumers.
So you need to do whatever it takes to preserve your newly re-established good credit. Make sure your bills are paid on time. If need be, request paper statements so that you’re forced to see how much you owe every month. Make it a habit to pay your bills as soon as you receive them. Consider writing “paid” on your bills once they are paid. That way if you see a bill laying around that isn’t “paid” you will know and can look into paying it. If you can’t pay your bills as soon as they come in, make sure you note the due date and pay the bills several days before. Payments made through online banking are usually the quickest, but can still take anywhere from two to five business days to reach the company you’re paying. So don’t pay the day it’s due or the day before!
Look into getting a secured Visa or MasterCard. Secured credit cards are a great way to build up your credit. Just make sure you’re on top of your payments. With revolving credit, such as secured credit cards, you could get away with the “minimum” payment. But to be safe, you should always try to pay it off. You will save money on interest charges and improve your debt ratio score (the amount of credit you have used versus the total available in your credit limit – obviously the less you use, the better).
The bottom line is, once you’re discharged from bankruptcy, do everything you can to remain debt free. If you find yourself struggling again, seek help immediately.