consumer proposal,  credit cards,  personal bankruptcy,  personal finance

Applying for a Home Trust Secured VISA to Rebuild Your Credit

Once a debtor has been discharged from bankruptcy, she can obtain a secured credit card to start rebuilding her credit.

Contrary to popular belief, a debtor who has been discharged from bankruptcy doesn’t have to wait 7 years (the length a bankruptcy stays on a credit file) to re-establish her credit history.

Immediately after her discharge, she can apply for and receive a secured credit card to start rebuilding her credit. This is how it works:

  1. Apply for a secured credit card. It is called a “secured” card because you’re required to provide a security deposit to the bank. Your credit limit will be equal to the amount of security you provide.
  2. Once you get the credit card, use it as a convenience card to purchase gas, groceries, etc.
  3. Pay off the balance in full each month so you are not charged any interest on unpaid balances.
  4. Your credit file gets updated every time you perform items 2 and 3.

If you do this consistently for about 2 years, you’ll have built a “track record” of paying your debts in full and on time. This will look favourable on your credit file, and will make it easier for you to obtain other forms of credit, such as a mortgage or a car loan.

The best product we’re aware of is the Home Trust Secured VISA. They require a minimum of just $500 to get you started. Here is a link to an application form.

Victor is the President of Fong and Partners Inc. He is a Licensed Insolvency Trustee and Chartered Professional Accountant. With over 20 years of experience in the insolvency field, Victor has been involved in both corporate and consumer insolvency engagements. Previously with a large national firm, Victor founded Fong and Partners Inc. in 2007 so that he could dedicate his professional life to help people from all walks of life to deal with their debt.