Rebuilding Credit - Repairing your credit score after filing proposal or bankruptcy

Chris Welker explains how you can repair your credit score after making a consumer proposal or filing bankruptcy.

Rebuilding Credit - Buying a house after filing proposal or bankruptcy

Chris Welker explains how you can buy a house after making a consumer proposal or filing for bankruptcy.

What is the best indicator of financial health?

Net worth = total assets you own minus the total debt you owe.

Why is credit rating a poor indicator of financial health?

Credit rating only focuses on payment history and is not related to your net worth. Many people borrow from one creditor to pay another which allows them to temporarily maintain their “excellent” credit rating, however their financial health is actually getting worse and they end up going further and further into debt.

How can I find out what is listed on my credit report?

Contact one of the credit reporting agencies: or

How do you read your credit report?

Your credit report is like a report card and each creditor assigns a mark.

  • Marks include a letter and a number
  • The best credit ratings are R1 or I1
  • “R” applies to revolving lines of credit and credit cards
  • “I” applies to instalment payment loans like mortgages and vehicle loans
  • The number represents the period or periods between payments

How do I get a free credit report?

Complete the relevant form to receive your free credit report by mail:

How can I improve my credit?

Your credit rating is like a report card. Having money problems, filing personal bankruptcy or making a consumer proposal will result in a bad mark on your credit report card. Therefore to rebuild your credit rating you have to get as many good marks as possible. The only way to get a good mark is to borrow money and pay it back within the time restrictions. The way to get a bank or credit card company to lend you money despite your poor credit rating is to:

  • Have a co-signer
  • Obtain a secure credit card

What are the risks of using a co-signer?

You and the co-signer become jointly liable for 100% of the debt. If you are unable to make payments, the co-signer will have to maintain the payments or his/her credit rating will be affected.

What are the differences between a cash card and a secured credit card?

Cash cards/pre-paid credit cards:

  • Do not involve credit and therefore don’t improve your credit rating
  • You deposit money into a “credit account” which is used to make purchases and must be refilled
  • No monthly statements
  • Offered by payday-loan companies

Secured credit cards:

  • Involve credit and help to improve your credit rating
  • Money is deposited with a bank or credit card company and held as collateral
  • You will receive regular monthly statements and be required to make payments
  • Offered by banks and other credit card companies

More Topics

Find out more about your situation. Jump to a different topic below.

Consumer Proposals

A consumer proposal is a formal debt settlement option legislated under the Bankruptcy and Insolvency Act and is filed with a licensed insolvency trustee. This option stops further creditor action and allows your debts to be compromised.


Filing personal bankruptcy allows you to be released from most of your debts. It is a formal process under the Bankruptcy and Insolvency Act and is filed by a licensed insolvency trustee.

Consolidation Loans

Debt Consolidation Loans are a popular debt management option for people who are experiencing money problems. Consolidation Loans consolidate your personal debts into one monthly payment, reduce interest charges and will not damage your credit rating.

Credit Counselling

Credit Counsellors can help you with budgeting and money management, filing a Debt Management Plan or by helping you communicate with your creditors. It typically makes sense to use a credit counsellor if you have a relatively small amount of debt.

Dealing With Collection Agencies and Wage Garnishment

Collection Agencies may take legal action against you if you owe money to your creditors and do not make payments. Collection Agencies must follow rules outlined in the Collection Agencies Act, which is regulated by the government.

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