Building Your Credit After Bankruptcy

Many individuals have found themselves in a situation where they have had to go bankrupt.  There can be many reasons that have led them to this situation but most often during the pre-bankruptcy experience their credit rating has been dramatically affected.

Unfortunately as bad credit begins to accumulate on the credit report it can be there for many years from the date that it was put on. Your bankruptcy is also going to show on your report.  This makes it really difficult for individuals that find that they really have a need to obtain credit and they are not able to do so because of their poor credit rating.

The first step that needs to be taken after a bankruptcy is positive steps to build up a sound credit rating once again.  This begins by checking your credit reports to make sure that there have been no errors made on it.

Errors on credit reports can be very common and if they’re detected then you can go through the process to have them removed.   The one thing that is going to happen with your bankruptcy report as a result of your bankrupt action is your credit to debt ratio is going to immediately improve.

What you want to be sure of when checking your report after your bankruptcy is to make sure that any of the creditors that were involved in your bankruptcy are now showing a zero balance on your credit report and that they are marked as discharged.

You now want to start building a positive payment history.   This means making sure that you pay all of your bills on time. Never assume that late payments for specific creditors will not show up on your credit report.   For example, being late on your cell phone payments could easily have a detrimental effect on your credit.

Making sure that all your payments are made on time is going to start building you a new credit foundation.   Then you may want to seek out what are called starter credit cards. These are cards where security is put against them and you are given a small amount to work with.   By making sure that you keep up with your payments and paying them out on the monthly basis will help to re-establish your credit.


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Sam Seidman, CPA, CA, LPA
629 Sheppard Avenue West
Toronto, Ontario
M3H 2S3

Telephone: (416) 398-1700
Fax: (416) 398-6226

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