The best ways to Rebuild 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 certainly taken the appropriate measures to resolve your financial troubles by declaring bankruptcy, and all your debts are well behind you now. However, there’s still a considerable amount of work involved to get your finances back on track. The main issue that discharged bankrupts encounter is their opportunity to borrow money, and the 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 besides a bankruptcy mark next to your name. There’s been no activity on your credit report, so a blank page will make banks and lenders reluctant in lending money to you solely because they can’t analyse your repayment habits. Rebuilding your credit rating is the best way to get your finances back on track, and make your recovery process as seamless as possible.

How to rebuild your credit report after discharge?
Due to the fact that lenders haven’t been able to analyse your financial management skills for the past three years, you have to start illustrating healthy financial habits. Here’s a list of ways in which you can do this

1. Reliable employment
Obtaining consistent and ongoing employment is an effective way to boost your financial security and show banks and financial institutions that you have a regular source of income. Steady employment will allow you to increase your savings and improve 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 over time will illustrate to lenders that you are financially dependable and are capable of making loan repayments. By transferring money into a dedicated savings account every month, even a small amount, will improve your credit history.

3. Limit your credit applications
Whenever you request a line of credit, it is documented on your credit history, so too many credit applications can adversely affect your credit rating. After being discharged, it’s imperative that you are pragmatic and mindful about the kinds of credit you apply for to increase the likelihood of approval. It’s best to request a single line of credit at once, and remember that secured loans and options with a guarantor or joint accounts will increase the chances of approval.

4. Think about a term deposit
If you’ve had the opportunity to save money during the course of your bankruptcy period, contemplate investing some of it into a term deposit account. Not only will you accumulate interest and strengthen your overall financial situation, it will likewise show lenders that you are financially reliable. As a result, your chances 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 type of repayment on time. Regardless of 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 capabilities.

6. Don’t be afraid to speak to financial institutions
If you intend to apply for a line of credit after your bankruptcy period, or find out what types of options are available to you, don’t be afraid to talk to banks or other financial institutions to review your circumstances. They are in the best position to advise of your eligibility, and give insight on what options would work best for your individual circumstances.

Be mindful of credit repair agencies
There are plenty of credit repair firms that will make all sorts of promises to improve your credit report. While many of them are helpful in challenging any incorrect listings on your credit record, they may not be able to do anything else to improve your credit report. The Government’s MoneySmart website ( advises discharged bankrupts to be “very careful” of these companies 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 queries with respect to your recovery process after bankruptcy, it’s always best to seek advice from qualified professionals. Speak with Bankruptcy Experts Sydney on 1300 795 575, or alternatively you can visit our website for additional information: