|January 12, 2018||Comments Closed|
Congratulations! You’ve successfully served your 3 year period of bankruptcy and have been discharged, so now what? You’ve clearly taken the most appropriate actions to settle your financial troubles by filing for bankruptcy, and all your debts are well behind you now. However, there’s still plenty of work involved to get your finances back on the right track. The most prevalent issue that discharged bankrupts face is their capability to borrow money, and the main reason for this is their bad credit rating.
For the last three 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 movement on your credit report, so a blank page will make banks and lenders hesitant in lending money to you purely because they can’t inspect your repayment behaviours. Repairing your credit history is the best way to get your finances back on course, and make your recovery process as seamless as possible.
The best ways to rebuild your credit report after discharge?
Considering that lenders haven’t had the ability to examine your financial management skills for the past 3 years, you need to begin presenting healthy financial habits. Here’s a list of ways in which you can do this
1. Steady employment
Achieving reliable and ongoing employment is an excellent way to enhance your financial security and show lending institutions that you have a regular income source. Regular employment will allow you to increase your savings and strengthen 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 demonstrate to loan providers that you are financially responsible 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
Whenever you request a line of credit, it is registered on your credit history, so lots of credit applications can negatively affect your credit history. After being discharged, it’s integral that you are sensible and careful about the kinds of credit you apply for to increase the likelihood of approval. It’s best to apply 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 likelihood 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 improve your overall financial circumstances, it will additionally show loan providers that you are financially dependable. Subsequently, 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 most certainly improve your credit history and increase the confidence that lenders have in your financial management skills.
6. Don’t be afraid 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 be reluctant to talk with banks or other financial institutions to discuss your situation. They are in the best position to advise of your eligibility, and give guidance on what options would work best for your individual circumstances.
Be mindful of credit repair companies
There are a lot of credit repair companies that will make all kinds of promises to improve your credit record. Although many of them are helpful 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’re in need of any help in rebuilding your credit history, or have any questions with respect to your recovery process after bankruptcy, it’s always best to seek advice from qualified professionals. Get in touch with Bankruptcy Tablelands on 1300 818 575, or alternatively you can visit our website for more information: http://www.bankruptcy-tablelands.com.au/