Credit Ratings

Insolvency & Credit Ratings

Credit ratings are kept by either Equifax or Trans Union, filing for bankruptcy or a consumer proposal can help you to rebuild your credit.

Credit Ratings & Bankruptcy

When a bankruptcy occurs, a report is recorded on your credit report by the Superintendent of Bankruptcy.

The credit report is sent to the collection agencies each month reporting everyone who has filed for bankruptcy.  This government controls the reporting of bankruptcies not the trustee.

Should anyone check your credit rating the bankruptcy or consumer proposal will be visible until they are discharged.

Bankruptcy & Credit Ratings

Credit ratings in Ontario are normally recorded on a scale of 1 to 9 with a perfect credit rating being R1.  Bankruptcies are reported as R9, for six (6) years plus the 9 months prior to the bankruptcy discharge.

The effect of a bankruptcy fades over time as the positive factors in your life improve and you no longer have any debts.

Most people realize the poor credit rating that bankruptcy brings, but for most their credit was already bad so the credit rating can only improve with time.

Consumer Proposals & Credit

Where a consumer proposal has been filed, the proposal will drop the credit rating to the lowest level.

The reporting agencies, take the consumer proposal off your credit score after three years have past from your last payment.

With this rating credit will be difficult to obtain, but most people within proposal understand this and taking an active role in rebuilding their credit.

While considering a proposal, a reduced term or paying off the debt sooner is better than later for your credit score.

Lenders and Credit

Businesses, banks and credit card companies want you to have credit so you can buy their products.

Credit institutions look at the borrower not just from their credit rating, but what is the ability and belief that the borrower will repay the loan.

In assessing credit and loans creditors will look at not only your credit rating but your relationship to:

  • are you working
  • what is your ability to repay the loan
  • what is your background e.g. living situation, bills, family
  • credit rating

The credit rating is just one factor lenders use to establish credit.

My credit rating was horrible but after the bankruptcy discharge I gradually worked to improve it, I got a secure credit card, then a small loan and now 4 years later I’m seeing the credit report improve each year.  Best thing I did was call YanchDey.  Thanks again, Danny Demers Scarborough.

Rebuilding Credit

After the bankruptcy is discharged, or the consumer proposal is finished you can start rebuilding your credit by:

  • ensuring that all bills are paid on time
  • make a monthly deposit into a savings account, for emergencies and down payments
  • obtain a secured credit card with a minimal balance up to 500 dollars

Rebuilding your credit is an ongoing process. You start slow and carefully learning to use credit wisely while increasing your credit rating over time.

Speak to an Insolvency Trustee

Bankruptcy Trustee Kelly Dey
Kelly Dey Insolvency Trustee

Questions about insolvency and bankruptcy? I invite you to call our office to speak to myself or one of our insolvency trustees.

We’re happy to speak over the phone or in-person at one of our offices.

Where you have questions or need some advice, please feel free to give us a call without cost or obligation.

Call us today at 905-721-7506.

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Yanch Dey Consumer Proposals

Call 905-721-7506