|January 12, 2018||Comments Closed|
Congratulations! You’ve successfully served your three year period of bankruptcy and have been discharged, so now what? You’ve undoubtedly taken the appropriate measures to resolve your financial dilemmas by filing for bankruptcy, and all your debts are well behind you now. However, there’s still a lot of work involved to get your finances back in order. The leading issue that discharged bankrupts confront is their capability to borrow money, and the main reason for this is their poor credit rating.
For the last 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 a blank page will make lending institutions reluctant in lending money to you solely because they can’t inspect your repayment behaviours. Rebuilding your credit history is the best way to get your finances back on the right track, and make your recovery process as seamless as possible.
The best ways to rebuild your credit report after discharge?
Given that lending institutions haven’t had the ability to examine your financial management skills for the past 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
Securing regular and ongoing employment is an excellent way to boost your financial security and display to banks and financial institutions that you have a regular income source. Steady employment will allow you to increase your savings and enhance 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 in time will demonstrate to financial institutions that you are financially responsible and are capable of making loan repayments. By putting money into a dedicated savings account every 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 marked on your credit history, so lots of credit applications can adversely affect your credit rating. After being discharged, it’s very important that you are sensible and vigilant about the types of credit you apply for to increase your chances of approval. It’s best to make an application for a single line of credit at a time, 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 during your bankruptcy period, contemplate putting part of it into a term deposit account. Not only will you accrue interest and enhance your overall financial situation, it will likewise show lending institutions that you are financially dependable. As a result, 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 type of repayment on time. Regardless if 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 talk with lenders
If you want to make an application for a line of credit after your bankruptcy period, or explore what types of options are available to you, don’t be reluctant to talk to lenders or other financial institutions to review your situation. They are in the best position to advise of your eligibility, and give recommendations on what options would work best for your individual situation.
Be cautious of credit repair companies
There are lots of credit repair firms that will make all sorts of promises to improve your credit record. Although many of them are helpful in challenging any incorrect listings on your credit history, 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 due to the fact that they “may not always be able to do what they claim they can”.
If you’re in need of any support in rebuilding your credit report, or have any concerns relating to your recovery process after bankruptcy, it’s always best to seek advice from qualified professionals. Speak to Bankruptcy Mount Isa on 1300 795 575, or alternatively you can visit our website for further information: https://www.bankruptcy-mountisa.com.au/