|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 actions to deal with your financial dilemmas by declaring bankruptcy, and all your debts are well behind you now. Bear in mind though, there’s still a lot of work involved to get your finances back on the right track. The most prevalent issue that discharged bankrupts experience is their opportunity to borrow money, and the main reason for this is their bad credit rating.
For the last 3 years, you’ve had no debts to pay back so your credit history has nothing to show besides a bankruptcy mark against your name. There’s been no activity on your credit report, so an empty page will make lenders hesitant in lending money to you purely because they can’t analyse your repayment behaviours. Rebuilding your credit history is the best way to get your finances back on course, and make your recovery process as seamless as possible.
Ways to rebuild your credit report after discharge?
Since financial institutions haven’t had the ability to ascertain your financial management skills for the past 3 years, you need to begin demonstrating healthy financial habits. Here’s a list of ways in which you can do this
1. Reliable employment
Securing regular and ongoing employment is a great way to boost your financial security and demonstrate to banks and financial institutions that you have a regular stream of income. Steady employment will allow you to increase your savings and strengthen your overall financial situation, leading to 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 demonstrate to financial institutions that you are financially sensible 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 history.
3. Limit your credit applications
Every time you request a line of credit, it is documented on your credit history, so lots of credit applications can adversely impact your credit history. After being discharged, it’s critical that you are sensible and vigilant about the kinds of credit you apply for to increase your chances of approval. It’s best to apply for just one line of credit at once, and keep in mind that secured loans and options with a guarantor or joint accounts will increase the likelihood of approval.
4. Think about a term deposit
If you’ve had the capacity to save money during the course of your bankruptcy period, consider investing part of it into a term deposit account. Not only will you accumulate interest and strengthen your overall financial position, it will likewise show loan providers that you are financially sensible. As a result, the likelihood of obtaining 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 definitely improve your credit history and increase the confidence that lending institutions have in your financial management abilities.
6. Don’t hesitate to speak with loan providers
If you wish to make an application for a line of credit after your bankruptcy period, or identify what types of options are available to you, don’t be afraid to speak to lenders or other financial institutions to review your circumstances. They are in the best position to advise of your eligibility, and offer guidance on what options would work best for your individual circumstances.
Be cautious of credit repair agencies
There are numerous credit repair firms that will make all kinds of promises to improve your credit record. Although some of them are useful 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 firms 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 guidance in rebuilding your credit report, or have any queries concerning your recovery process after bankruptcy, it’s always best to seek advice from qualified professionals. Phone Bankruptcy Gold Coast on 1300 818 575, or alternatively you can visit our website for more information: http://www.bankruptcy-goldcoast.net.au/