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How long will my bankruptcy affect my credit report?
There are two main credit reporting agencies that operate across Canada: Equifax and Trans Union. Credit reporting agencies collect information on your credit history, such as how much total debt you owe and whether you make timely payments. Low levels of debt with full payments on time will result in a good credit score; higher total debt with late or missed payments will result in a worse score. New lenders will check your score before deciding whether to extend more credit to you.
When you file for bankruptcy the Office of the Superintendent of Bankruptcy (OSB) will advise the credit agencies. If you file any bankruptcy, consumer proposal, debt management plan, or debt settlement, a note will appear on your credit report that will negatively impact your rating.
How long they can stay on your report varies slightly from province to province. In general in Ontario a first bankruptcy will stay on your credit report for six years after you are discharged (usually 9 or 21 months after you assign into bankruptcy) and a consumer proposal/DMP/settlement will remain for three years after all of your payments are completed.
This does not mean you cannot borrow any money during the time these notations are on your report. It simply means you are a high risk lender and as such you must demonstrate exemplary behaviour post filing to rebuild your score. In order to do this you should:
- Consider a secured credit card
- Start saving so you have a larger down payment for any purchase you will need financing for.
- Pay your bills on time
- If you do receive credit use it wisely. Track your score and make sure you don’t miss any payments.