|January 12, 2018||Comments Closed|
Congratulations! You’ve successfully fulfilled your three year period of bankruptcy and have been discharged, so what now? You’ve undoubtedly taken the most suitable steps to resolve your financial problems by declaring bankruptcy, and all your debts are well behind you now. However, there’s still a lot of work involved to get your finances back in order. The greatest issue that discharged bankrupts experience is their opportunity to borrow money, and the reason for this is their poor credit rating.
For the past 3 years, you’ve had no debts to pay back so your credit history has nothing to show except for a bankruptcy mark next to your name. There’s been no activity on your credit report, so an empty page will make financial institutions reluctant in lending money to you only because they can’t ascertain your repayment behaviours. Repairing your credit history is the best way to get your finances back on track, and make your recovery process as smooth as possible.
Ways to rebuild your credit report after discharge?
Given that lending institutions haven’t had the ability to analyse your financial management skills for the last three years, you will need to start presenting healthy financial habits. Here’s a list of ways in which you can do this
1. Stable employment
Obtaining reliable and ongoing employment is a terrific way to boost your financial security and display to loan providers that you have a regular stream of income. Stable employment will enable you to increase your savings and enhance your overall financial situation, resulting in a better credit rating.
2. Increase your savings balance
Your savings account is an asset, so increasing your savings balance over time will show loan providers that you are financially dependable 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 history.
3. Limit your credit applications
Every time you request a line of credit, it is registered on your credit history, so excessive credit applications can adversely affect your credit history. After being discharged, it’s imperative that you are sensible and cautious about the kinds of credit you apply for to increase your chances of approval. It’s best to apply for a single line of credit at a time, and remember that secured loans and options with a guarantor or joint accounts will increase the probability of approval.
4. Consider a term deposit
If you’ve been able to save money during the course of your bankruptcy period, think about investing some of it into a term deposit account. Not only will you accrue interest and strengthen your overall financial situation, it will likewise show loan providers that you are financially sensible. As a result, your chances 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. Regardless if it’s your rent, electricity, or even a secured loan in your name, making these repayments on time will definitely improve your credit rating and increase the confidence that financial institutions have in your financial management skills.
6. Don’t be afraid to speak with lenders
If you want to make an application for a line of credit after your bankruptcy period, or identify what types of options are available to you, don’t be reluctant to speak with banks or other financial institutions to discuss your situation. They are in the best position to advise of your eligibility, and give advice on what options would work best for your personal circumstances.
Be cautious of credit repair firms
There are lots of credit repair firms that will make all sorts of promises to improve your credit record. While many of them are useful in disbuting 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 firms because they “may not always be able to do what they claim they can”.
If you’re in need of any assistance in repairing your credit report, or have any questions with respect to your recovery process after bankruptcy, it’s always best to seek advice from qualified professionals. Talk to Bankruptcy Rockhampton on 1300 818 575, or alternatively you can visit our website for more information: http://www.bankruptcy-rockhampton.com.au/