|January 12, 2018||0|
Congratulations! You’ve successfully fulfilled your 3 year period of bankruptcy and have been discharged, so what now? You’ve unquestionably taken the most suitable actions to address your financial dilemmas by declaring bankruptcy, and all your debts are well behind you now. Despite this, there’s still plenty of work involved to get your finances back on the right track. The most significant issue that discharged bankrupts face is their capability to borrow money, and the reason for this is their poor credit rating.
For the past three years, you’ve had no debts to repay so your credit history has nothing to show other than a bankruptcy mark against your name. There’s been no movement on your credit report, so a blank page will make lenders reluctant in lending money to you purely because they can’t analyse your repayment behaviours. Repairing your credit rating is the best way to get your finances back on the right track, and make your recovery process as seamless as possible.
How you can rebuild your credit report after discharge?
Considering that lending institutions haven’t had the ability to review your financial management skills for the past 3 years, you need to begin demonstrating healthy financial habits. Here’s a list of ways in which you can do this
1. Stable employment
Obtaining steady and ongoing employment is a terrific way to boost your financial security and demonstrate to financial institutions that you have a regular income source. Reliable employment will allow you to increase your savings and strengthen your overall financial situation, leading to 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 demonstrate to financial institutions that you are financially reliable and are capable of making loan repayments. By putting money into a dedicated savings account each month, even a small amount, will improve your credit rating.
3. Limit your credit applications
Every time you request a line of credit, it is documented on your credit report, so too many credit applications can adversely impact your credit history. After being discharged, it’s important that you are practical and mindful about the types of credit you apply for to increase your chances of approval. It’s best to request a single line of credit at a time, 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 managed to save money during the course of your bankruptcy period, think about putting part of it into a term deposit account. Not only will you accumulate interest and enhance your overall financial position, it will additionally show loan providers that you are financially dependable. Subsequently, the likelihood of securing 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 or not it’s your electricity, rent, or even a secured loan in your name, making these repayments on time will definitely improve your credit history and increase the confidence that lending institutions have in your financial management abilities.
6. Don’t hesitate to speak with lending institutions
If you wish to request a line of credit after your bankruptcy period, or find out what types of options are available to you, don’t hesitate to talk to lenders or other financial institutions to discuss your situation. They are in the best position to advise of your eligibility, and provide guidance on what options would work best for your personal circumstances.
Be careful with credit repair firms
There are a number of credit repair companies that will make all sorts of promises to improve your credit report. Although many of them are useful in challenging any incorrect listings on your credit record, they may not be able to do anything else to improve your credit record. 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 advice in rebuilding your credit report, or have any concerns regarding your recovery process after bankruptcy, it’s always best to seek advice from qualified professionals. Contact Fresh Start Solutions Hobart on 1300 818 575, or alternatively you can visit our website for more information: Bankruptcy Hobart