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How Long After Bankruptcy Can I Get a Credit Card?
In Canada, a first bankruptcy will stay on your credit report for 6-7 years. During this time your credit score will likely be at the lowest possible level, making it less likely that you'll be able to obtain an unsecured credit card. However, you do have alternative options.
Why Would I be Turned Down for an Unsecured Credit Card?
When you apply for a credit card, your issuer considers two fundamental factors: your income and your credit rating. Even if you have a steady job and good income—and even if you've paid down your previous debts in full—your credit rating may tell a completely different story. With a low rating and bankruptcy on your record, you will be considered a high-risk customer.
Is it a Good Idea to Get a Credit Card After Bankruptcy?
You may think that it's smart to stay away from credit cards if you've recently filed for bankruptcy. After all, credit card misuse may have been one of the factors that contributed to your insolvency. But using a credit card responsibly is actually one of the most effective ways to rebuild your credit score.
It's true: if you obtain a secured credit card and proceed to use it wisely—charging a few reasonable amounts every month, and paying off the balance in full and on time—you're demonstrating that you're a responsible borrower who can be trusted to use credit as intended. Your credit rating, as a result, will start to recover.
Note that activity on a prepaid credit card is not usually reported to credit bureaus, so you can't use them to rebuild your score.
Know Your Options
To learn more about the ways you'll be affected by declaring bankruptcy—and to find out if you have any alternative debt solutions available to you—get in touch with a Licensed Insolvency Trustees at your local MNP LTD office. We're here to help you put your debt behind you and get your finances back on track.