Re-Establishing Your Credit – 3 Simple Steps to Getting Back on Track
Overview
Rebuilding your credit after financial setbacks is entirely possible—and essential if you're planning to apply for a mortgage. With time, discipline, and the right strategy, you can restore your credit profile and regain financial confidence. Here are three simple steps to help you get back on track.
Step 1: Borrow Again (Strategically)
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Why It Matters: Rebuilding credit starts with demonstrating that you can handle new credit responsibly.
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How to Start:
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RRSP Loans: Easier to qualify for since they’re secured by your RRSP. Bonus: they help you rebuild both credit and net worth.
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Secured Credit Cards: Provide a refundable deposit (e.g., $2,000) and receive a credit card with a matching limit.
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Traditional Credit Options: It’s often best to wait until a bank or credit union approves your application, as these accounts are more likely to be recognized by mortgage lenders.
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Tip: Work with a trusted financial advisor to explore the right type of credit for your situation.
Step 2: Always Make the Minimum Payments
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Why It Matters: Even small payments signal consistency and reliability to lenders.
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Avoid This Mistake: Missing small minimum payments can damage your credit—set up automatic payments if necessary.
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Pro Tip: Paying more than the minimum is great, but never miss a due date, no matter how small the amount.
Step 3: Be Patient
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Why It Matters: Lenders typically want to see at least two years of clean, re-established credit before approving a mortgage.
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What to Expect: Credit rebuilding isn’t instant—but steady, responsible credit behavior will pay off.
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Pro Tip: Use this time to build up savings, manage your budget, and avoid any new delinquencies.
Final Thoughts
Re-establishing credit takes effort, but it’s absolutely achievable. Focus on smart borrowing, consistent payments, and patience—and you’ll be in a strong position to qualify for a mortgage in the future.
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