How To Qualify For Loans After Bankruptcy

Negative information on your credit report can feel crippling. After you declare bankruptcy, that information stays on your credit report for six years from the date of your discharge. That number increases to 14 years if it’s not your first bankruptcy.

All information about your credit comes from lenders. They report information to Canada’s two large credit reporting agencies, Equifax and Trans Union. The two different agencies report things a little differently.

People ask us at David Sklar & Associates all the time how long bankruptcy will be on their credit history. Equifax automatically purges a bankruptcy from your credit report six years after your date of discharge. Trans Union, however, will continue to show your bankruptcy for up to seven years after your discharge, the maximum amount of time allowed in Ontario.

Six years is a long time to wait for a bankruptcy to come off your credit report and start rebuilding your credit history. Lenders rely on your credit history to assess the risk of lending money to you.

Everything from a mortgage to a car loan to a credit card can depend on your credit history. When you have a bad credit score, it’s not just harder to get a loan, it also makes loans more expensive. Because they take on a higher risk, the lender expects a higher interest rate. That can cost you in the long run.

If you have been thinking about declaring bankruptcy but you’re worried about long-term consequences, keep in mind that you don’t have to wait six years to start rebuilding your credit. There are a few things you can do before bankruptcy is taken off your credit report to get started.

#1 Get Your Credit Report

bad credit

The first thing you should do is check your credit report to see what it looks like. If you see a mistake that negatively impacts your credit, bring it to the agency’s attention. If you’ve recently declared bankruptcy, your score may be very low. Often people who have declared bankruptcy missed a number of payments beforehand as well, which is bad for your credit score.

#2 Credit Counseling

Credit counselling is available from David Sklar & Associates, and in many cases, you must take credit counselling courses after a bankruptcy or consumer proposal. In addition, to help with the personal bankruptcy process, credit counselling will teach you how to rebuild your credit.

#3 Improving Your Credit History

credit history form

The most effective way to turn your credit report around is to keep things positive. Pay your bills in full and on time, with no exceptions. Trim down your credit cards to one, which you can use to make small purchases that you pay in full immediately. You do need to keep using credit to improve your score. No credit history since your bankruptcy won’t help you either.

#4 Be Wary of Loans

loan form

Be wary of high-interest loans while in a consumer proposal or a bankruptcy. It may be tempting to accept a debt consolidation loan or another high-interest loan to settle debts or make a big purchase, but it can hurt you in the long run.

Here at David Sklar & Associates, we help get people out of debt and rebuild their credit histories. You can rebuild your credit history long before bankruptcy has been cleared from your report.

Take Your First Step Towards A Debt Free Life

If you are overwhelmed by debt and live in the Toronto area, call us at 416-498-9200 to book a FREE, confidential appointment. We will review your financial situation in detail and discuss all of your options with you. Alternatively, you can fill out the form below and our team will reach out to you. 

Share This!

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on pinterest

Ready to live debt free?

I cannot emphasize enough how thankful I am for Jackie Stanley's help with filing for bankruptcy.All of us dread being put in this position and we have a million questions about the process but trust me Jackie makes it so easy for you that you don't have to do anything yourself!She is very kind and friendly and puts you at ease right away. She emphasizes with you and let's you know it's not your fault.Most importantly when you leave that first meeting you will not believe the load that is taken off your shoulders. You can actually feel it!You are a godsend Jackie and I can't thank you enough!!I hope you are highly valued there as much as you are by me!
Sue Murray
18:45 05 Dec 21
Putting together and executing a Consumer Proposal can be daunting, that is unless you work with Cori Naron at David Sklar & Associates Inc. Cori's advice and support has been instrumental over the past five years. Thank you Cori!!
Barry Kuntz
20:37 01 Dec 21
I’m very happy with the services I received for Jackie Stanley who helped me get my finances in order. It was a quick and easy process & all of my questions were answered.
Amanda Frappier
01:18 19 Nov 21
I have had the privilege of being supported by Jackie at David Sklar Associate. She was very helpful, very professional and very friendly. She gave me the help I need. Thank you Jackie for your help.
Alex Taylor
22:03 17 Nov 21
Got my probe solved, great service
arny raposo
17:02 11 Nov 21
Jackie at Daivid Sklar and Associates is such a pleasure to work with. She explained everything in great detail and is always there when I have a question or concern. She really cares about her clients.
Steve Medica
09:33 10 Nov 21
I filed a proposal with another group, which came in as a referral from one of my brokers. My experience went from ok to bad to worse, due to lack of communication and education on the process I was to embark on. I worked with Cori Naron in the past, and I came to her now for help on literally doing the work that the other group should have done. Cori stepped in, educated me, advised on rights, responsibilities, how the process works and what potential outcomes may happen. I do not have enough words of recognition and gratitude for what she did - she alleviated stress, anxiety, dead-end thoughts and she made me live again. Congrats to DSklar for hiring her and retaining such talent.
Giani Kokolakis
18:45 25 Oct 21
Very professional service. Before contacting David Sklar & Associates i contacted bunch of other firms they seemed fishy. After I spoke with Jason Sklar at Hamilton Office I discovered professionalism with hope. I was explained every step of my situation with solution professionally. Thank you David Sklar & Associates.
Wajay Awan
07:29 12 Oct 21
I met David a few months ago and i am glad I did. He has helped me all the way through my bankruptcy with good advice and explained every step of the process. David is a very down to earth and very professional. Anytime I've had a question I was able to reach out to David by phone or email and he always got back to me. If your struggling with your bills and need a way to get help, I strongly recommend David Sklar &Associates to help you. My experience with them on 1-5scale would be a 5;; My life is so much better now, thanks to David Sklar.
Bruce Locke
16:13 08 Oct 21
I have had the privilege of being supported by Jackie S, at David Sklar n Associate.She was helpful, professional and friendly. I was able to get the help I needed at a difficult time in my life. I would recommend anyone who needs support with working out their debts to ask for Jackie, she will be waiting to assist however she can to help you through your debts. She works with a team who is always ready and responsive.Thank you Jackie and your team:)
Denise Simpson
15:17 09 Sep 21
js_loader