|January 12, 2018||Comments Closed|
Congratulations! You’ve successfully fulfilled your three year period of bankruptcy and have been discharged, so now what? You’ve undoubtedly taken the appropriate actions to resolve your financial difficulties by declaring bankruptcy, and all your debts are well behind you now. Bear in mind though, there’s still a good deal of work required to get your finances back in order. The most prevalent issue that discharged bankrupts experience is their capability to borrow money, and the reason for this is their bad credit rating.
For the last 3 years, you’ve had no debts to repay so your credit history has nothing to show with the exception of a bankruptcy mark against your name. There’s been no activity on your credit report, so a blank page will make lending institutions reluctant in lending money to you simply because they can’t evaluate your repayment behaviours. Rebuilding your credit history is the best way to get your finances back on track, and make your recovery process as seamless as possible.
Ways to repair your credit report after discharge?
Considering that loan providers haven’t been able to inspect your financial management skills for the last three years, you need to start illustrating healthy financial habits. Here’s a list of ways in which you can do this
1. Regular employment
Achieving stable and ongoing employment is a fantastic way to increase your financial security and display to financial institutions that you have a regular income stream. Stable employment will enable you to increase your savings and bolster your overall financial condition, resulting in a better credit rating.
2. Increase your savings balance
Your savings account is an asset, so increasing your savings balance as time go on will show loan providers that you are financially sensible and are capable of making loan repayments. By putting money into a specialised savings account every month, even a small amount, will improve your credit history.
3. Limit your credit applications
Whenever you apply for a line of credit, it is recorded on your credit report, so lots of credit applications can negatively affect your credit history. After being discharged, it’s extremely important that you are practical and vigilant about the kinds of credit you apply for to increase the likelihood of approval. It’s best to request just one line of credit at once, and keep in mind that secured loans and options with a guarantor or joint accounts will increase the likelihood of approval.
4. Think about a term deposit
If you’ve been able to save money during your bankruptcy period, contemplate investing some of it into a term deposit account. Not only will you accumulate interest and enhance your overall financial circumstances, it will additionally show financial institutions that you are financially sensible. Consequently, the likelihood of acquiring a loan will be increased which leads to an improved credit rating.
5. Always make repayments on time
One of the most important things you can do as a discharged bankrupt is to make any kind of repayment on time. Regardless of whether it’s your rent, electricity, or even a secured loan in your name, making these repayments on time will most definitely improve your credit history and increase the confidence that lenders have in your financial management abilities.
6. Don’t hesitate to talk with lenders
If you wish to request a line of credit after your bankruptcy period, or identify what types of options are available to you, don’t be afraid to talk to banks or other financial institutions to review your circumstances. They are in the best position to advise of your eligibility, and give recommendations on what options would work best for your individual circumstances.
Be cautious of credit repair firms
There are lots of credit repair agencies that will make all kinds of promises to improve your credit report. Whilst some of them are helpful in challenging any incorrect listings on your credit history, they may not be able to do anything else to improve your credit report. The Government’s MoneySmart website (https://www.moneysmart.gov.au/) advises discharged bankrupts to be “very careful” of these agencies due to the fact that they “may not always be able to do what they claim they can”.
If you’re in need of any guidance in rebuilding your credit history, or have any inquiries concerning your recovery process after bankruptcy, it’s always best to seek advice from qualified professionals. Get in contact with Bankruptcy Experts Bendigo on 1300 795 575, or alternatively you can visit our website for additional information: www.bankruptcyexpertsbendigo.com.au