September 5, 2017

Credit becomes available surprisingly quickly after discharge from bankruptcy.

Some companies actively solicit credit business from former bankrupts simply because it makes sense, really good business sense.  Here’s why, most people who have filed for bankruptcy do not want to do it again.  Most people who have filed for bankruptcy want to re-establish credit and most people who have been discharged from bankruptcy have little or no competing debts to repay so they may be less likely to default.

One regional furniture store is very keen to sell furniture, on credit terms, to newly discharged bankrupts.  They have a specifically designed programme that allows the store to sell furniture to a niche clientele that otherwise wouldn’t be buying.  The clients are unlikely to default on payments – they are motivated to rebuild credit – and they don’t mind paying higher interest as a penance for credit repair.

After the borrower has completed the first round of credit payments, usually over a one year term, clients can buy more furniture and have more credit access.

Some credit card companies are also fairly quick off the mark in targeting income earning discharged bankrupts who are enticed by easy access to lower credit limits but with higher than average interest rates.

Re-establishing credit is a process that begins with a thorough review of your credit bureau report to ensure that all errors or omissions are corrected.  It is also important to make application to specifically targeted lenders who are known to take risks and have more accessible credit facilities.

Taking a shotgun approach to borrowing, just applying everywhere, can actually do far more damage than good.  Paradoxically credit begets credit, the more you have and use the more available it becomes, up to a point.

Credit is important for a few purchases such as housing or a new car.  But the majority of Canadians are addicted to credit using it for everything from lunch and groceries to vacations and even gambling in government run casinos.  Think about what you really “need” credit for and use it wisely and appropriately.  If you have been recently discharged from bankruptcy instead of rushing to get back into debt take a year and put a few hundred dollars (per month) aside into a savings plan before applying for more debt.