|January 12, 2018||0|
Congratulations! You’ve successfully fulfilled your 3 year period of bankruptcy and have been discharged, so now what? You’ve unquestionably taken the most appropriate actions to deal with your financial issues by filing for bankruptcy, and all your debts are well behind you now. Despite this, there’s still a considerable amount of work required to get your finances back on track. The leading issue that discharged bankrupts confront is their ability to borrow money, and the main 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 with the exception of a bankruptcy mark against your name. There’s been no activity on your credit report, so an empty page will make financial institutions hesitant in lending money to you only because they can’t analyse your repayment habits. Rebuilding your credit rating is the best way to get your finances back on track, and make your recovery process as smooth as possible.
The best ways to repair your credit report after discharge?
Due to the fact that lenders haven’t been able to ascertain your financial management skills for the last 3 years, you will need to begin displaying healthy financial habits. Here’s a list of ways in which you can do this
1. Stable employment
Achieving regular and ongoing employment is a fantastic way to increase your financial security and display to financial institutions that you have a regular stream of income. Reliable employment will allow you to increase your savings and strengthen your overall financial circumstances, leading to a better credit rating.
2. Increase your savings balance
Your savings account is an asset, so increasing your savings balance over time will show lending institutions that you are financially dependable and are capable of making loan repayments. By transferring money into a specialised savings account every month, even a small amount, will improve your credit history.
3. Limit your credit applications
Whenever you request a line of credit, it is marked on your credit report, so lots of credit applications can negatively impact your credit rating. After being discharged, it’s integral that you are realistic and vigilant about the kinds 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 probability of approval.
4. Contemplate a term deposit
If you’ve been able to save money during your bankruptcy period, think about putting some of it into a term deposit account. Not only will you accrue interest and improve your overall financial circumstances, it will also show financial institutions that you are financially sensible. Subsequently, 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 unquestionably improve your credit report and increase the confidence that lenders have in your financial management skills.
6. Don’t hesitate to talk to financial institutions
If you intend to request a line of credit after your bankruptcy period, or identify what types of options are available to you, don’t hesitate to talk with banks or other financial institutions to discuss your circumstances. They are in the best position to advise of your eligibility, and provide recommendations on what options would work best for your personal situation.
Be mindful of credit repair agencies
There are plenty of credit repair firms that will make all sorts of promises to improve your credit record. Even though many 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 record. The Government’s MoneySmart website (https://www.moneysmart.gov.au/) advises discharged bankrupts to be “very careful” of these firms 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 support in rebuilding your credit history, or have any questions regarding your recovery process after bankruptcy, it’s always best to seek advice from qualified professionals. Get in contact with Bankruptcy Canberra on 1300 818 575, or alternatively you can visit our website for additional information: http://www.bankruptcy-canberra.com.au/