Congratulations! You’ve successfully served your three year period of bankruptcy and have been discharged, so what now? You’ve certainly taken the most suitable actions to deal with your financial problems by filing for bankruptcy, and all your debts are well behind you now. Bear in mind though, there’s still a good deal of work involved to get your finances back in order. The most significant issue that discharged bankrupts experience is their opportunity to borrow money, and the reason for this is their poor credit rating.

For the previous 3 years, you’ve had no debts to pay back so your credit history has nothing to show except for a bankruptcy mark against your name. There’s been no movement on your credit report, so a blank page will make banks and lenders reluctant in lending money to you purely because they can’t ascertain your repayment habits. Repairing your credit rating is the best way to get your finances back on course, and make your recovery process as smooth as possible.

How you can repair your credit report after discharge?

Given that lenders haven’t had the ability to ascertain your financial management skills for the last 3 years, you have to start exhibiting healthy financial habits. Here’s a list of ways in which you can do this

1. Reliable employment

Achieving steady and ongoing employment is a great way to improve your financial security and display to financial institutions that you have a regular stream of income. Reliable employment will allow you to increase your savings and enhance your overall financial condition, resulting in a better credit rating.

2. Increase your savings balance

Your savings account is an asset, so increasing your savings balance gradually will show loan providers that you are financially dependable and are capable of making loan repayments. By transferring money into a specialised savings account every month, even a small amount, will improve your credit rating.

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 history. After being discharged, it’s imperative that you are realistic and careful about the kinds 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 probability 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 putting some of it into a term deposit account. Not only will you accumulate interest and boost your overall financial situation, it will also show lending institutions that you are financially sensible. 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 if it’s your electricity, rent, or even a secured loan in your name, making these repayments on time will definitely improve your credit rating and increase the confidence that loan providers have in your financial management skills.

6. Don’t be afraid to speak to financial institutions

If you want to apply for a line of credit after your bankruptcy period, or uncover what types of options are available to you, don’t hesitate to talk with lenders or other financial institutions to review your circumstances. They are in the best position to advise of your eligibility, and provide recommendations on what options would work best for your individual situation.

Beware of credit repair agencies

There are a number of credit repair companies that will make all kinds of promises to improve your credit record. While some of them are effective 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 assistance in rebuilding your credit report, or have any queries with respect to your recovery process after bankruptcy, it’s always best to seek advice from qualified professionals. Get in touch with Bankruptcy Experts Whitsundays on 1300 795 575, or alternatively you can visit our website for further information: Bankruptcy Whitsundays