To start with, here are some excerpts straight from the government of Canada.
Always pay your bills on time. Although the payment of your utility bills, such as phone, cable and electricity, is not recorded in your credit report, some cell phone companies may report late payments to the credit-reporting agencies, which could affect your score.
Try to pay your bills in full by the due date. If you aren’t able to do this, pay at least the required minimum amount shown on your monthly credit card statement.
Try to pay your debts as quickly as possible.
Don’t go over the credit limit on your credit card. Try to keep your balance well below the limit. The higher your balance, the more impact it has on your credit score.
Reduce the number of credit applications you make. If too many potential lenders ask about your credit this has a negative effect on your score. However, your score does not change when you ask for information about your own credit report.
Make sure you have a credit history. You may have a low score because you do not have a record of owing money and paying it back. You can build a credit history by using a credit card.
If you are thinking of hiring someone to repair your credit, remember this:
A credit bureau will not remove accurate negative information from your credit report before the legal time period has expired; therefore, do not believe anyone who claims they can get negative information removed from your credit report faster than is legally required.
There are no “loopholes” or laws that credit repair companies can use to get correct information off your credit report.
No credit repair company can do anything you can’t do for yourself. It is impossible for a third party to make changes in your file if the facts have been correctly reported. There are individuals and companies that claim they can fix a bad credit file. This is not the case. If a file includes accurate, yet negative information about your credit history, this information cannot be changed. Information will only be changed when your file contains an inaccuracy. (some companies claim they may choose to remove negatives at their own discretion – if you bribe them into it – true?)
The only way to rectify a poor credit rating is to adopt sound credit practices for a period of time.
More advice from the Government of Canada:
No credit repair company can do anything you can’t do for yourself – as long as you have the confidence to negotiate as effectively as a credit repair company. There are individuals and companies that claim they can fix a bad credit file. The Government of Canada says “This is not the case. If a file includes accurate, yet negative information about your credit history, this information cannot be changed”. Information will only be changed when your file contains an inaccuracy.
The Government officially states: QUOTE: “There is no reason for you to pay a company to rebuild your credit rating”
Repair After Bankruptcy:
Don’t wait until being discharged from bankruptcy or consumer proposal to begin repairing your credit. This is a common and HUGE mistake. From very early on during your bankruptcy or consumer proposal process, you CAN and SHOULD be taking steps to rebuild your credit and your beacon score.
Here are some tips …
1. Open a savings account and make regular deposits.
2. Establish a relationship with a loan officer. Tell that you are repairing your credit and once your relationship is established, take out a small loan and pay it back promptly.
3. Apply for a credit card. You should be able to get one with a low limit, using your savings account or other collateral. Once you get one, use it regularly and pay your balance on time.
IF A BANK ONLY OFFERS YOU A SECURED CREDIT CARD, TAKE IT. Treat it like a credit card, keep under your limit, make your payments, etc.
Having a credit card and not using it does not help. You need to use the credit monthly and pay it back.
4. Do not make multiple credit applications all at once; it hurts your score.
5. Try to keep your credit card balance well below the limit. The higher your balance, the more impact it has on your score.
6. Report your discharge. Set the stage by getting all documents that your consumer proposal or bankruptcy is completed. Send these discharge certificates or full compliance certificates to the credit bureaus. Keep them with your important documents as you will need them in the future when applying for credit.
7. Check your credit reports, both Transunion and Equifax. Check for errors and inaccuracies and follow the online steps to repair an inaccurate credit bureau. If you find accuracies or errors, follow this process to modify the information.
Trans Union 1-800-888-4213
8. Be a dependable customer. Pay your bills, on time, in full, every month, with no exceptions; rebuilding trust is key. Utilities and cell phone companies usually report if there is a late payment.
9. Spend less than you earn. Although this seems obvious, building credit will require you to build a savings as well.
10. Fix your Credit Yourself. Beware of companies that promise to help you re-establish your credit for a fee. Their ability to change the information that appears in your credit file is no different than any other person’s. The only difference may lay in the fact that negotiation may not be your strong suit, and you may be over-stressed by your credit problems, whereas a professional may be eager to aggressively negotiate debt reduction and a payment plan for you. Only your creditors are able to alter bureau information. You do not need to pay a third party to obtain, discuss, review or make changes to your credit report. You have the right to access your information and make changes to your file if there is an inaccuracy or if you want to include a comment.
Finding Errors And Fixing Them To Improve Your Score
Order your credit report and look for errors that are lowering your credit score.
An error such as duplicate credit items will lower your score.
It’s important to have more good credit items on your credit report than bad credit items. This is why you adopt new credit and better behaviour, so that the bad items will be pushed down on your report.
If you need more time to make a payment, knowing exactly when the creditor reports to the credit bureau might buy you a few extra days grace. In Canada, if you warn utility companies in advance that you need an extra 2 or 3 weeks to make a payment, they will usually say YES. But it is far better to WARN them than to just make a late payment.