Filing a consumer proposal can be an effective way for those who are going through financial difficulties to renegotiate their debts. However, ensuring that you can rebuild your credit score is fundamental to effectively regain control of your life. In this blog, we are sharing valuable tips that can help you rebuild your credit after a consumer proposal.
Keep an Eye on Your Credit Report
It is important that you monitor your credit report once your consumer proposal is done. In some cases, errors may occur and creditors that were part of your consumer proposal may still be listed on your report. This can make future creditors think that you still have payments being collected, which can prevent you from rebuilding your credit. For that reason, keeping an eye on your report and being vigilant for inaccuracies is fundamental.
Set a Budget
One of the most important things to regain control of your financial life is setting and sticking to a budget. This can help you have a better understanding of where your money is going and what you can do to avoid getting back into debt. Sticking to a budget and ensuring that you have full control of your expenses can greatly contribute to the process of rebuilding your credit score.
Get a Secured Credit Card
Building credit score often involves proving to creditors that you are able to make payments in a responsible manner. Getting a secured credit card can help you pay small amounts every month and rebuild your credit over time. These cards require a cash deposit that is typically equal to the limit available, which makes them a safer option for those going through financial difficulties. Over time, payments to a secured credit card can help you build credit.
Make Payments on Time
By far, the most efficient way of building your credit score is making payments on time. This includes not only payments for your credit cards, but also utilities, phone bills, etc. In many cases, it is recommended that you set pre-authorized payments for your bills to avoid missing a payment. For credit cards, make sure to pay at least the minimum payment in case you are having difficulties paying the full balance due.
It is important to understand that, apart from contributing to your credit score, making payments on time also helps you develop healthy financial habits, which is essential for those coming out of a consumer proposal.
Get a Small RRSP Loan
Another way you can rebuild your credit score is by opening an RRSP account and asking the bank for a small loan. In months such as January and February, banks often have more attractive interest rates, providing you with better conditions to make payments on time. This is an efficient way of proving to creditors that you are able to handle payments in a financially healthy manner, which helps you rebuild your credit over time.
Licensed Insolvency Trustee in Ontario
If you are going through difficult financial times and are looking for professionals who can help you get back on track, D. & A. MacLeod Company Ltd. is here for you. Our experienced team of professionals can provide you with efficient credit counselling to help you regain control of your financial life. Reach out to us and let us provide you with the assistance you need in Ottawa.
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