|January 12, 2018||Comments Closed|
Congratulations! You’ve successfully served your 3 year period of bankruptcy and have been discharged, so what now? You’ve definitely taken the appropriate actions to deal with your financial problems by filing for 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 in order. The biggest issue that discharged bankrupts confront is their ability to borrow money, and the reason for this is their bad credit rating.
For the past three years, you’ve had no debts to pay off so your credit history has nothing to show with the exception of a bankruptcy mark against your name. There’s been no movement on your credit report, so an empty page will make financial institutions reluctant in lending money to you purely because they can’t evaluate your repayment behaviours. Repairing your credit rating is the best way to get your finances back on course, and make your recovery process as smooth as possible.
The best ways to rebuild your credit report after discharge?
Since financial institutions haven’t been able to check your financial management skills for the past three years, you have to start displaying healthy financial habits. Here’s a list of ways in which you can do this
1. Steady employment
Acquiring consistent and ongoing employment is a terrific way to increase your financial security and display to financial institutions that you have a regular income stream. Reliable employment will enable 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 with time will display to lenders that you are financially responsible 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 documented on your credit history, so too many credit applications can adversely affect your credit rating. After being discharged, it’s essential that you are pragmatic and vigilant about the types of credit you apply for to increase the likelihood of approval. It’s best to request just one line of credit at once, and bear in mind 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 had the opportunity to save money throughout your bankruptcy period, contemplate putting some of it into a term deposit account. Not only will you accrue interest and boost your overall financial circumstances, it will additionally show loan providers that you are financially dependable. Subsequently, the likelihood 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 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 unquestionably improve your credit report and increase the confidence that financial institutions have in your financial management capabilities.
6. Don’t be afraid to speak to lenders
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 to lenders or other financial institutions to discuss your circumstances. They are in the best position to advise of your eligibility, and give advice 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 report. While 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 record. The Government’s MoneySmart website (https://www.moneysmart.gov.au/) advises discharged bankrupts to be “very careful” of these companies due to the fact that they “may not always be able to do what they claim they can”.
If you need any help in repairing your credit history, or have any inquiries with respect to your recovery process after bankruptcy, it’s always best to seek advice from qualified professionals. Get in contact with Bankruptcy Parramatta on 1300 818 575, or alternatively you can visit our website for further information: https://www.bankruptcy-parramatta.com.au/