|January 12, 2018||Comments Closed|
Congratulations! You’ve successfully served your three year period of bankruptcy and have been discharged, so what now? You’ve undoubtedly taken the most suitable actions to settle your financial challenges by declaring bankruptcy, and all your debts are well behind you now. However, there’s still a good deal of work involved to get your finances back in order. The biggest issue that discharged bankrupts confront is their capability to borrow money, and the reason for this is their poor credit rating.
For the last 3 years, you’ve had no debts to repay so your credit history has nothing to show except for a bankruptcy mark against your name. There’s been no activity on your credit report, so an empty page will make lending institutions reluctant in lending money to you simply because they can’t evaluate your repayment behaviours. Rebuilding your credit history is the best way to get your finances back in order, and make your recovery process as seamless as possible.
How you can repair your credit report after discharge?
Considering that loan providers haven’t been able to ascertain your financial management skills for the last 3 years, you need to start displaying healthy financial habits. Here’s a list of ways in which you can do this
1. Reliable employment
Attaining consistent and ongoing employment is an effective way to boost your financial security and show lenders that you have a regular stream of income. Regular employment will allow you to increase your savings and enhance 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 gradually will show financial institutions that you are financially responsible and are capable of making loan repayments. By transferring 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 request a line of credit, it is recorded on your credit report, so lots of credit applications can negatively affect your credit rating. After being discharged, it’s vital that you are practical and vigilant about the types of credit you apply for to increase the likelihood of approval. It’s best to make an application for a single 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. Consider a term deposit
If you’ve managed to save money during the course of your bankruptcy period, consider investing some of it into a term deposit account. Not only will you accumulate interest and enhance your overall financial situation, it will likewise show lenders that you are financially dependable. Therefore, your chances 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 type of repayment on time. Regardless of whether 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 lenders have in your financial management abilities.
6. Don’t be afraid to talk with lending institutions
If you wish to request a line of credit after your bankruptcy period, or uncover what types of options are available to you, don’t hesitate to talk with lenders or other financial institutions to review your circumstances. They are in the best position to advise of your eligibility, and offer guidance on what options would work best for your individual circumstances.
Be careful with credit repair firms
There are plenty of credit repair companies that will make all kinds of promises to improve your credit record. Although some of them are effective in disbuting 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 since they “may not always be able to do what they claim they can”.
If you require any help in repairing your credit report, or have any queries with respect to your recovery process after bankruptcy, it’s always best to seek advice from qualified professionals. Get in contact with Fresh Start Solutions Brisbane on 1300 818 575, or alternatively you can visit our website for further information: http://www.bankruptcy-brisbane.net.au/