|January 12, 2018||0|
Congratulations! You’ve successfully fulfilled your 3 year period of bankruptcy and have been discharged, so now what? You’ve undoubtedly taken the right actions to deal with your financial dilemmas by filing for bankruptcy, and all your debts are well behind you now. Having said this, there’s still a good deal of work involved to get your finances back in order. The leading issue that discharged bankrupts experience is their opportunity to borrow money, and the main reason for this is their bad credit rating.
For the previous 3 years, you’ve had no debts to pay back so your credit history has nothing to show other than a bankruptcy mark next to your name. There’s been no movement on your credit report, so a blank page will make banks and lenders hesitant in lending money to you only because they can’t ascertain your repayment behaviours. Rebuilding your credit history is the best way to get your finances back on track, and make your recovery process as smooth as possible.
How you can repair your credit report after discharge?
Due to the fact that lenders haven’t been able to review your financial management skills for the previous three years, you need to begin exhibiting healthy financial habits. Here’s a list of ways in which you can do this
1. Reliable employment
Securing stable and ongoing employment is a fantastic way to enhance your financial security and display to banks and financial institutions that you have a regular source of income. Reliable employment will enable you to increase your savings and improve 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 as time go on will show loan providers that you are financially reliable 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 rating.
3. Limit your credit applications
Whenever you request a line of credit, it is registered on your credit report, so too many credit applications can adversely affect your credit history. After being discharged, it’s extremely important that you are realistic and cautious about the types of credit you apply for to increase your chances of approval. It’s best to make an application for just one line of credit at a time, and remember that secured loans and options with a guarantor or joint accounts will increase the chances of approval.
4. Think about a term deposit
If you’ve managed to save money during your bankruptcy period, consider putting part of it into a term deposit account. Not only will you accumulate interest and enhance your overall financial position, it will also show financial institutions that you are financially responsible. As a result, 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. Whether it’s your electricity, rent, or even a secured loan in your name, making these repayments on time will most definitely improve your credit rating and increase the confidence that loan providers have in your financial management abilities.
6. Don’t be afraid to speak to lending institutions
If you want to request a line of credit after your bankruptcy period, or discover what types of options are available to you, don’t be afraid 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 guidance on what options would work best for your personal situation.
Beware of credit repair agencies
There are a lot of credit repair agencies that will make all kinds of promises to improve your credit record. Even though many of them are useful in disbuting any incorrect listings on your credit record, 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 since they “may not always be able to do what they claim they can”.
If you require any help and support in repairing your credit report, or have any concerns about your recovery process after bankruptcy, it’s always best to seek advice from qualified professionals. Reach out to Bankruptcy Cassowary Coast on 1300 818 575, or alternatively you can visit our website for additional information: http://www.bankruptcy-cassowarycoast.com.au/