|January 12, 2018||0|
Congratulations! You’ve successfully served your 3 year period of bankruptcy and have been discharged, so now what? You’ve definitely taken the appropriate measures to settle your financial difficulties by declaring bankruptcy, and all your debts are well behind you now. Keep in mind though, there’s still a good deal of work involved to get your finances back in order. The most prevalent issue that discharged bankrupts face is their capability to borrow money, and the reason for this is their poor credit rating.
For the previous three years, you’ve had no debts to pay off so your credit history has nothing to show besides a bankruptcy mark against your name. There’s been no activity on your credit report, so an empty page will make banks and lenders reluctant in lending money to you purely because they can’t ascertain your repayment habits. Repairing your credit rating is the best way to get your finances back in order, and make your recovery process as seamless as possible.
Ways to repair your credit report after discharge?
Due to the fact that financial institutions haven’t been able to analyse your financial management skills for the previous 3 years, you will need to begin demonstrating healthy financial habits. Here’s a list of ways in which you can do this
1. Regular employment
Acquiring reliable and ongoing employment is an effective way to increase your financial security and show financial institutions that you have a regular income source. Stable employment will enable you to increase your savings and bolster your overall financial circumstances, resulting in a better credit rating.
2. Increase your savings balance
Your savings account is an asset, so increasing your savings balance in time will display to financial institutions that you are financially reliable and are capable of making loan repayments. By putting money into a specialised savings account each month, even a small amount, will improve your credit history.
3. Limit your credit applications
Every time you apply for a line of credit, it is marked on your credit report, so too many credit applications can negatively affect your credit rating. After being discharged, it’s imperative that you are realistic and careful about the types of credit you apply for to increase the likelihood of approval. It’s best to apply for only one line of credit at once, and always remember that secured loans and options with a guarantor or joint accounts will increase the probability of approval.
4. Contemplate a term deposit
If you’ve had the chance to save money throughout your bankruptcy period, consider putting part of it into a term deposit account. Not only will you accrue interest and improve your overall financial circumstances, it will likewise show financial institutions that you are financially dependable. Therefore, the likelihood of obtaining 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. 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 be afraid to speak with financial institutions
If you intend to request a line of credit after your bankruptcy period, or explore what types of options are available to you, don’t be reluctant to speak with banks or other financial institutions to review your situation. They are in the best position to advise of your eligibility, and give advice on what options would work best for your individual situation.
Beware of credit repair companies
There are lots of credit repair companies that will make all sorts of promises to improve your credit record. Even though some of them are useful 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 because they “may not always be able to do what they claim they can”.
If you’re in need of any help and support in repairing your credit report, or have any concerns regarding your recovery process after bankruptcy, it’s always best to seek advice from qualified professionals. Reach out to Fresh Start Solutions Gold Coast on 1300 818 575, or alternatively you can visit our website for additional information:Bankruptcy Goldcoast