How To Repair Your Credit Rating After Bankruptcy?

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How To Repair Your Credit Rating After Bankruptcy?

Congratulations! You’ve successfully fulfilled your 3 year period of bankruptcy and have been discharged, so what now? You’ve undoubtedly taken the appropriate measures to deal with your financial challenges by filing for bankruptcy, and all your debts are well behind you now. Despite this, there’s still a good deal of work required to get your finances back on track. The most significant issue that discharged bankrupts encounter is their capability to borrow money, and the main reason for this is their bad credit rating.

For the past 3 years, you’ve had no debts to pay off so your credit history has nothing to show with the exception of a bankruptcy mark next to your name. There’s been no activity on your credit report, so an empty page will make banks and lenders reluctant in lending money to you only because they can’t assess your repayment behaviours. Repairing your credit history is the best way to get your finances back in order, and make your recovery process as smooth as possible.

Ways to repair your credit report after discharge?

Since financial institutions haven’t had the ability to inspect your financial management skills for the past 3 years, you need to begin illustrating healthy financial habits. Here’s a list of ways in which you can do this

  1. Stable employment

Achieving regular and ongoing employment is an excellent way to enhance your financial security and demonstrate to banks and financial institutions that you have a regular stream of income. Stable employment will enable you to increase your savings and enhance your overall financial circumstances, resulting in a better credit rating.

  1. Increase your savings balance

Your savings account is an asset, so increasing your savings balance over time will show financial institutions 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 history.

  1. Limit your credit applications

Every time you request a line of credit, it is marked on your credit history, so excessive credit applications can negatively impact your credit history. After being discharged, it’s pivotal that you are sensible and vigilant about the kinds of credit you apply for to increase your chances of approval. It’s best to make an application for only one line of credit at once, and always remember that secured loans and options with a guarantor or joint accounts will increase the likelihood of approval.

  1. Contemplate a term deposit

If you’ve had the chance to save money throughout your bankruptcy period, consider investing part of it into a term deposit account. Not only will you accumulate interest and enhance your overall financial situation, it will additionally show lenders that you are financially reliable. Consequently, your chances of acquiring a loan will be increased which leads to an improved credit rating.

  1. 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. 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 abilities.

  1. Don’t be afraid to speak to lending institutions

If you want 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 with lenders or other financial institutions to review your situation. They are in the best position to advise of your eligibility, and provide guidance on what options would work best for your personal circumstances.

Be careful with credit repair agencies

There are numerous credit repair firms that will make all sorts of promises to improve your credit report. Even though some of them are helpful 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 ( advises discharged bankrupts to be “very careful” of these companies since they “may not always be able to do what they claim they can”.

If you need any support in rebuilding your credit history, or have any queries with respect to your recovery process after bankruptcy, it’s always best to seek advice from qualified professionals. Speak with Bankruptcy Experts Wollongong on 1300 795 575, or alternatively you can visit our website for additional information:

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