|January 12, 2018||Comments Closed|
Congratulations! You’ve successfully fulfilled your three year period of bankruptcy and have been discharged, so now what? You’ve certainly taken the appropriate measures to deal with your financial problems by declaring bankruptcy, and all your debts are well behind you now. Despite this, there’s still a good deal of work involved to get your finances back on the right track. The most significant 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 pay back so your credit history has nothing to show with the exception of a bankruptcy mark next to your name. There’s been no activity on your credit report, so a blank page will make lenders hesitant in lending money to you simply because they can’t analyse your repayment behaviours. Repairing your credit rating is the best way to get your finances back in order, and make your recovery process as smooth as possible.
How you can repair your credit report after discharge?
Due to the fact that loan providers haven’t been able to assess your financial management skills for the previous three years, you will want to start presenting healthy financial habits. Here’s a list of ways in which you can do this
1. Reliable employment
Attaining stable and ongoing employment is a fantastic way to improve your financial security and display to lenders that you have a regular income source. Regular employment will allow you to increase your savings and strengthen your overall financial circumstances, resulting in a better credit rating.
2. Increase your savings balance
Your savings account is an asset, so increasing your savings balance gradually will demonstrate to loan providers that you are financially sensible and are capable of making loan repayments. By transferring money into a dedicated savings account each month, even a small amount, will improve your credit history.
3. Limit your credit applications
Each time you apply for a line of credit, it is recorded on your credit history, so too many credit applications can adversely affect your credit rating. After being discharged, it’s imperative that you are sensible and mindful about the types of credit you apply for to increase the likelihood of approval. It’s best to apply for only one line of credit at once, and bear in mind that secured loans and options with a guarantor or joint accounts will increase the chances of approval.
4. Contemplate a term deposit
If you’ve had the capacity to save money during your bankruptcy period, consider putting part of it into a term deposit account. Not only will you accumulate interest and boost your overall financial situation, it will additionally show lending institutions that you are financially sensible. Consequently, your chances 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. 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 report and increase the confidence that financial institutions have in your financial management skills.
6. Don’t be afraid to speak to lending institutions
If you wish to make an application for 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 lenders or other financial institutions to discuss your circumstances. They are in the best position to advise of your eligibility, and give insight on what options would work best for your personal situation.
Be mindful of credit repair companies
There are a number of credit repair companies that will make all sorts of promises to improve your credit record. While some of them are reliable 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 companies since they “may not always be able to do what they claim they can”.
If you need any help and support in rebuilding your credit history, or have any concerns with respect to your recovery process after bankruptcy, it’s always best to seek advice from qualified professionals. Reach out to Bankruptcy Wyong on 1300 818 575, or alternatively you can visit our website for additional information: http://www.bankruptcy-wyong.com.au/