So Your Credit Sucks! Now What?

your credit sucks

Does your credit suck? Unfortunately many Canadians are finding themselves in the same predicament. The interesting thing is that while some people monitor their credit score on a regular basis, others never look at it. And then one day they go to apply for a mortgage or a new car loan and they are shocked to find out that they are denied because their credit sucks.

Why Would Your Credit Suck?

Your credit score could be a mess for a number of reasons.

Perhaps you’ve never had a credit card or a loan in your name, and therefore you have no credit history.

Other reasons could be because you have delinquent accounts, meaning you are behind on repaying your loans, including any credit cards. Even a few late payments can affect your credit score.

Maxing out your credit cards is a great way to quickly reduce your credit score, as it makes you look like a high risk.

Closing credit accounts that you felt you no longer needed also decreases your credit score as it erases your good credit history.

The most obvious reason that your credit sucks is because you declared bankruptcy in the past 7 years.

So Now What?

If you recently found out that your credit sucks there are a number of things that you can do to improve it.

Improve Your Credit Score

New Credit Card

If you do not have any credit at all, approach your bank and apply for a new credit card. Your first card may have a very low limit such as $500 or so, but after you use it and pay it off on time you will find that your bank will eventually increase your limit.

Credit Report

If you have credit cards, pull a copy of your credit report and score and review your accounts to make sure there are no errors and that all of the accounts that are listed are in fact yours. Then add up what you owe and create a budget that will allow you to pay down your debt. If you find items on your credit report that are incorrect you need to get them removed right away. You have two choices on how to handle that. You can contact the credit bureaus yourself and dispute the items or you can contact a credit repair company and ask them for assistance. 

Old Credit Cards

If you have a credit card that you have not used in a while, dust it off and start using it again, but use it responsibly.


Improving your credit score will be harder if you declared bankruptcy, but you should get to work on it as soon as possible.

The first thing you can do is visit your bank and apply for a secured credit card, either Visa or Mastercard. Yes, you will have to hand over some cash to get the credit card, but your bank will hold that as a security deposit. You will use the secured credit card as you would any card. Make purchases and then pay the amount owing before the due date. Ask your bank how long they will hold the deposit for.

Typically the answer is one year, if you consistently make your payments on time.

Department Store Credit Cards

You can also try applying for a department store credit card as people have found that it is easier to be approved for a department store card than it is to be approved for a Visa or Mastercard. Again, use this card responsibly to rebuild your credit score.

Family Member’s Credit Card

Another option is to sign on as an authorized user on a family member’s credit card account. Of course this only works if that family member agrees and if they have a good credit score. This could be a spouse with a good score, or perhaps your parents. If they practice good credit habits you will benefit from that.

Demonstrate Responsibility

Show lenders that you are responsible and can manage your money well by paying off your loans and credit cards on time every month. This will help you rebuild your credit history, which in turn, will increase your credit score.


    • Mel @ brokeGIRLrich

      Mel @ brokeGIRLrich 01/16/2014 7:48 a.m. #

      Great tips for rebuilding your credit score! I definitely second checking your credit report! I tried to apply for a rewards card a couple of years ago and was declined twice. I couldn't figure out why since I always paid my bills on time and I thought my credit must be pretty good. It actually turned out that being an authorized user on the card my parents had given me to go to college years earlier (I didn't even have the card anymore) was jacking up my credit, since my mom was not so hot about paying her bills. Once my name was removed from her account, my credit seriously hopped more than 100 points, my credit limit was increased by like $5,000 in 6 months and I had rewards cards sending me requests instead of going to them.

      • Sicorra

        Sicorra 01/16/2014 5:09 p.m. #

        You make an excellent point Mel. While I mentioned the benefits of being on a joint account you unfortunately experienced the complete opposite by being on a joint account with your mother. No matter who you partner with, if one doesn't pay the other one will have credit score issues too.

        Good for you for figuring it all out and getting your score back up :-)

    • Leslie Tayne

      Leslie Tayne 01/16/2014 9:07 a.m. #

      Credit scores determine how high of a risk a consumer is for a loan or mortgage. Look at previous credit card statements to see where your money is going and see where you can trim spending. Check to see if you have any late payments and address those payments first in order to pay off any outstanding debt.

    • krantcents

      krantcents 01/16/2014 5:35 p.m. #

      Physical and financial health goes hand in hand. If you have bad credit or you are overweight, you have to take control of your spending and eating/physical activity to get to a healthy condition.

    • Corina Ramos

      Corina Ramos 01/16/2014 6:02 p.m. #

      Hey there Sicorra,

      I've spent years trying to fix my credit...I'm not there yet but it's better than it was a couple years ago.

      It's funny I'm reading this post today...Earlier this afternoon Mario dusted off our gas card and we realized it expired last July, lol. We had to call the company and ask for new cards. At least it shows we've been disciplined, LOL.

      I haven't pulled out free credit report his year...I need to do that and see how it looks.

      I don't know a lot about bankruptcy but we had thought about it before...

      Thanks for sharing these tips with us. Hope you're having a great Thursday.

      • Sicorra

        Sicorra 01/17/2014 7:25 p.m. #

        Hey Corina, Thanks and good for you for resolving any credit issues you may have had. It takes time to boost your score again, but as you keep working on it, it will only get better.

    • Christy Garrett @ Uplifting Families

      Christy Garrett @ Uplifting Families 01/17/2014 6:28 p.m. #

      I had to recover from a bankruptcy. It hasn't been easy and I am slowly rebuilding my credit. I have heard to take out CD's for $500 and borrow against them, then repay CD as a way to build credit. I never did this because I never had the cash flow to do it but it was recommended by several banks.

      • Sicorra

        Sicorra 01/17/2014 7:36 p.m. #

        Hey Christy, Good for you for rebuilding your credit. Doing the CD lending route would be similar to using secured credit cards. Doing both would probably work well too. Coming up with the cash upfront can be a problem though.

    • Maggie@SquarePennies

      Maggie@SquarePennies 01/18/2014 11:15 a.m. #

      Watch out for certain items you might put on your credit card. If you use it at a liquor store, casino, a pawn shop or even a resale shop, it will ding your score. Creditors associate those behaviors with people who are either reckless with their money or who are in bad financial shape.

      Also it might seem unfair, but prospective employers often check your credit score. It helps them decide how responsible you are. Getting your credit score repaired and raised affects so many parts of your life. It's well worth the effort to get it on the right track!

      • Sicorra

        Sicorra 01/19/2014 8:37 p.m. #

        Hey Maggie, thanks so much for your points!

        I have never heard that your score is affected based on things that you buy with your credit cards. I wonder if that is true in Canada as well.

        I know more and more companies in the US are checking credit scores before hiring people. In Canada that mostly happens if you apply to work at a bank and they have to have your permission to check it. And yes, I agree that a poor score does have an overall affect on your life.

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