Auto Source  Financial can answer some of the questions people often ask relate to credit repair after bankruptcy: I filed for personal bankruptcy in Canada – for how long will it stay on my credit report? Can I somehow repair my credit after filing for bankruptcy? Is it possible to erase bad credit history?

Your credit rating determines whether or not you will be able to get a loan in the future. A bad credit report might mean that you will not be able to get a car loan, mortgage, credit card or debt consolidation loan.

A black mark on your credit report, such as filing for bankruptcy will remain on your credit report for up to seven years. After that, the information is dropped from your record. Unless it’s a double bankruptcy which will then stay on your credit report for 12 years.

Is credit repair after bankruptcy possible or do you have to wait the seven years to pass for the record to get cleaned? Unfortunately, you can’t totally erase your bad credit, but there are ways to accelerate restoring your credit – and we can guide and advise you on this. You can’t remove bankruptcy from your credit report – but there are things that you can do to improve your credit history.

How to repair bad credit – The six step plan

  • Get your credit report

First, you need to do a credit check on yourself. In most cases you can obtain your own credit report for free, or for a small charge. There are two main credit bureaus in Canada:

  • Equifax 1-800-465-7166

  • Trans Union  1-800-888-4213

  • Review your credit report

Review your credit report for any errors or negative comments. An error may include a debt that you have already repaid in which case you should show proof of payment to the credit agency and they will remove the item from your credit report.

A negative comment may result from a department store credit card that you stopped using ten years ago. If it had a $12 balance owing, it may still show up on your credit report.

  • Correct any errors on your credit report

If you find an error, contact the credit bureau and offer proof that you do not owe the money. You may need a letter from the creditor indicating the payments were made, or you may provide cancelled cheques to indicate payments were received. You should send a letter to the credit bureau explaining your side of the story; your comments can be attached to your credit report.

  • Repair Information on your credit report

If you owe a creditor $12 and they have filed a negative credit report with the credit bureau, repay the creditor and ask the creditor to note on your credit report that the debt has been paid. If a debt legally owes, the debt must be paid or discharged before it can show on your credit report as being paid or discharged.

  • Pay off your Debt

Even if your credit report indicates that you have made all of your regular monthly payments, a potential lender may look unfavourably on high levels of debt. The solution is to aggressively pay off as much of your existing debts as possible before applying for a new loan.

We recommend that you pay off your highest interest debts first, so pay the 18% interest credit card off first, and then repay the 16% interest credit card…BUT, do not neglect the lower interest debt! Make sure to make the minimum required payment so as not to incur any New negative credit.

The lower your debt load, the easier it will be to obtain a loan. Your monthly household budget should include schedule specific repayment amounts for each of your debts.

  • Take Action

If you have more debt than you can possibly repay, your credit report will only improve by formally dealing with your debts. You may need to file for bankruptcy or a formal consumer proposal to your creditors, or consider consumer credit counseling and a debt management plan. For professional advice and further assistance, please contact a debt management consultant or a licensed bankruptcy trustee.

To conclude, you can’t erase a bad credit with a personal bankruptcy note on it, but partial credit repair after bankruptcy and credit improvement in general is possible – and it is in your hands. If you want to obtain a car loan you can actually start rebuilding your credit prior to discharge of your bankruptcy.

Auto Source Financial works with banks and lenders who will grant you a car loan if you have bad credit or even while you’re in bankruptcy or consumer proposal. You can start rebuilding your new credit Now. You may have to pay a high interest rate in the beginning, but this is equivalent to “buying your way to a better credit rating.” After you have made 10-12 payments on time Auto Source will help you reduce your interest rate through a refinance or new loan. If you think you cannot get a Car because you are bankrupt or have no credit or bad credit talk to us and start building your credit Now!

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