Welcome to this start-to-finish resource for you to rebuild your credit! If you faithfully follow the process we have outlined, your credit score will improve over time. How long will it take? Well, that depends—how damaged is your score, and what are the reasons for the damage?
Before we get started, let's be clear about a couple of points. First, credit rebuilding is your responsibility alone—no one else can do it for you, and you can't 'buy' a better credit score. There are no magic bullets.
Although credit rebuilding is not that difficult to do, there is some detail involved, and it can be a bit of a grind. It's going to take time, patience and perseverance on your part!
You are likely here because you filed a consumer proposal or bankruptcy or have had credit issues in the past and now have a damaged score. You want to know where to start and what to do—this guide will do that.
Your credit score is only three digits long, but those three digits have a significant impact on how the rest of the world looks at you. They can dictate your eligibility for loans and other credit, the accommodations you can rent, and it can even affect your employment opportunities.
Let's get started!
This article is the first in a 5-part series of posts that will take you through everything you need to know about your credit score, including who looks at it, how the score is calculated, and how you can fix your credit if it is damaged for any reason.
Before we get started, let's be clear about a couple of points. First, credit rebuilding is your responsibility alone—no one else can do it for you, and you can't “buy” a better credit score. There are no magic bullets. Although the work of credit rebuilding is not that difficult to do, there is some detail involved, and it can be a bit of a grind. It's going to take time, patience and perseverance on your part!
In the first article in this series on credit rebuilding, we looked at why your credit score is important, who uses this information, and we started to look at how the scoring system works. This post will go a bit deeper into the calculations that lead to your credit score.
Once you know how the system works, the steps required to repair and rebuild your credit will make more sense.
Part 1 and Part 2 of this series on credit rebuilding have explained what your credit score means, who uses it, and how the credit bureaus establish your score. Now let's get into what you must do if you want to rebuild your credit.
The first step, before any rebuilding, is to repair your credit. Why? If there are negative items or mistakes on your credit reports, you must do what you can to address those items before spending any money on new credit products or services. If you don't, you may be wasting your time and your money!
To repair your credit, you must first find out what your credit report is saying—that's the starting point.
Earlier posts in this series (Part 1, Part 2, Part 3) have provided a foundation for what the credit scoring system is about and how it works. We've also provided a blueprint for how you can repair your credit before rebuilding your credit. Now for the exciting stuff—rebuilding your credit score!
Always keep in mind that improvements to your credit score will still take time. You can trash your credit score in a couple of months, but building it back will take much, much longer.
One major hurdle you must overcome in your credit rebuilding program is this: you need to start using credit again! It may be hard to accept that you need to start using credit again if you've just filed a proposal or bankruptcy or if you've had issues before with managing credit. However, it's the only way to re-establish your relationship with the lenders and credit bureaus.
Your purpose in using credit now will be completely different. Before, you probably relied on credit to make ends meet every month. Once you file a proposal or bankruptcy, your take-home pay every month should be sufficient for your living expenses and leave some leftover for savings.
If you have already taken the appropriate action steps to rebuild your credit, you should be well on your way to a higher credit score. Now it's time to fine-tune and build on what you have already accomplished.
In this series' previous blog posts (Part 1, Part 2, Part 3, Part 4), we've provided you with all the background and action steps to rebuild your credit. Now it's time to fine-tune and build on what you have already accomplished.