|January 12, 2018||Comments Closed|
Congratulations! You’ve successfully fulfilled your 3 year period of bankruptcy and have been discharged, so what now? You’ve certainly taken the appropriate measures to address your financial difficulties by filing for bankruptcy, and all your debts are well behind you now. Despite this, there’s still plenty of work required to get your finances back on track. The greatest issue that discharged bankrupts encounter is their opportunity to borrow money, and the reason for this is their bad credit rating.
For the last three years, you’ve had no debts to pay off so your credit history has nothing to show except for 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 simply because they can’t assess your repayment habits. 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?
Considering that lending institutions haven’t been able to ascertain your financial management skills for the past 3 years, you will need to start displaying healthy financial habits. Here’s a list of ways in which you can do this
1. Reliable employment
Acquiring stable and ongoing employment is a terrific way to enhance your financial security and demonstrate to lending institutions that you have a regular income source. Stable employment will allow you to increase your savings and bolster 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 as time go on 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 make an application for a line of credit, it is registered on your credit report, so too many credit applications can negatively impact your credit rating. After being discharged, it’s extremely important that you are realistic and mindful about the kinds of credit you apply for to increase your chances of approval. It’s best to request just one line of credit at once, and always remember 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 managed to save money throughout your bankruptcy period, consider putting part of it into a term deposit account. Not only will you accumulate interest and strengthen your overall financial position, it will likewise show lending institutions that you are financially sensible. 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 evidently improve your credit history and increase the confidence that financial institutions have in your financial management abilities.
6. Don’t hesitate 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 hesitate to speak to lenders or other financial institutions to discuss your situation. They are in the best position to advise of your eligibility, and provide insight on what options would work best for your individual circumstances.
Be cautious of credit repair agencies
There are a number of credit repair firms that will make all kinds of promises to improve your credit record. While many of them are reliable 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 firms due to the fact that they “may not always be able to do what they claim they can”.
If you require any guidance in repairing your credit history, or have any questions about your recovery process after bankruptcy, it’s always best to seek advice from qualified professionals. Contact Bankruptcy Gympie on 1300 818 575, or alternatively you can visit our website for further information: http://www.bankruptcy-gympie.com.au/