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If you have a bad credit history, whether it’s from a previous insolvency or a series of childhood mistakes, don’t worry. This is not a life sentence! Various tools are at your disposal to restore your credit file , which will have the effect of increasing your score and allowing you to obtain credit with advantageous conditions.

How to rebuild my credit report

To redo your credit report, you must create a new history that shows that you are able to pay your accounts and your debts while respecting the established deadlines. You must therefore seek new credit and repay it correctly to show your creditors that they can trust you.

This article was written in collaboration with Vanessa Fiorito, Financial Reorganization Advisor at Pierre Roy & Associés

If the cooperation of the credit bureaus is difficult, the Commission d’accès à l’information du Québec can help you make the necessary corrections to your credit file so that it accurately reflects your financial situation. Details can be found on their website at the following address:

It is important to note that verifying the accuracy of the information contained in your credit file is essential since in 80% of cases, there are errors! In 90% of cases, incorrect registrations can lower your credit score. It is therefore necessary to contact the credit bureaus in order to rectify them.

To learn more about how the credit file works and all the elements that make it up, we invite you to consult a very comprehensive document prepared by the Financial Consumer Agency of Canada: Understanding your credit report and your credit score (PDF) .

Secured credit cards

As mentioned previously, we must create a new credit history in order to demonstrate to our future creditors that we are trustworthy. That being said, it can be a bit difficult to get credit when we have a bad record. This is why the first step is to apply for a secured credit card, therefore for which you must give a deposit to the bank as security or guarantee . The latter will keep it in order to reduce the credit risk and over time, the sums could be returned to you following a history of good payments. The card’s credit limit could also be increased.

Several companies offer secured credit cards, for example:

In the case of Capital One, their website states that card approval is guaranteed as long as 4 conditions are met. Of these, you must not have an account that was not in good standing within the last year. n the event of a consumer proposal, it will be necessary to wait at least one year after the filing of the procedure to make the request.

According to our research, although the Mastercard offered by Tangerine Bank is not secure, its approval rate is higher than the average of other financial institutions.

It is suggested to have only one credit card and to pay it regularly before the end of each month. Of course, it’s always best to use the card according to your monthly budget in order to pay off the balance in full . Thus, you will have a good credit score and your budget will be well balanced. This also avoids the accumulation of interest to be reimbursed on a residual balance of the card.

As a general rule, never use more than 30-35% of the available credit limit. This way, you can demonstrate to your creditors that you are not dependent on credit and that the majority of your income is for non-credit expenses.

Secured loans

In order to continue to accumulate good credit, we suggest considering obtaining a secured loan from a financial institution such as a bank. The latter will also be guaranteed by a deposit and will be registered in your credit file. Reimbursement according to the established terms will have the effect of giving a good credit rating to the loan in question and will allow you to increase your score.

A good strategy is to apply for the smallest amount offered by the bank, then repay the amounts according to the established agreement. Once the loan has been repaid, return to your institution and request a new one. Proceed in this way in order to obtain 3 or 4 secured loans in a row. Thus, your future creditors will be able to see that despite your negative credit history, all your most recent transactions show a very good rating and that your score will be greatly improved! You can also consider the possibility of making a larger purchase such as a car or a property.

For more information on credit you can refer to Credit Counseling Canada .

Caution !

There is no magic formula for rebuilding your credit file. The key is to get new credit and pay it off to create a positive payment history . This takes time and rigor and cannot be done by anyone other than you.

This is why you have to be wary when certain companies say they can redo your credit file for you! Many of them promote being able to help you get rid of bad credit bureau debt and even boost your credit rating for you.

Most of these companies offer the following services:

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