If you have filed for bankruptcy and are thinking that there is no way you can possibly recover from this stage in your financial life – you are mistaken! It is normal to feel despair after such a drastic occurrence, but at Australian Bankruptcy Services we know that there is life after bankruptcy. That is why we want to share with you our tips for rebuilding your credit file after bankruptcy.
- Open A New Savings Account
When opening a new savings account, be sure to shop around at different banks and credit unions. Compare the interest rates and fees as well as the various services each provide. This will help you get the best return on your savings and put you in a good position from which to bounce back.
- Get A Secured Credit Card or Loan
We do not suggest that you immediately do this – only when you have some money in savings and some time has passed since your discharge from bankruptcy. Secured debts can sometimes be easier to get, as the bank can sell the secured asset if you do not pay. It is recommended that you start with a small limit and raise it as your credit improves. If managed well over time, this will help to put you in good stead again.
- Pay Off Your Balance Every Month
To maintain your credit rating, try to pay off the full balance of your credit card as often as possible. Be sure to live within your means and only buy what you can afford to pay back, lest you fall into the same cycle of debt again.
- Get Copies Of Your Credit Report
By checking your credit report semi-regularly you can keep an eye on your progress and ensure that no additional marks have been made against you.
To request a copy of your credit report contact these national CRBs:
Veda: MyCreditFile.com.au (Veda) Phone: 1300 762 207
D&B: CheckYourCredit.com.auPhone: 1300 734 806
Experian: Experian Credit Services Phone: 1300 783 684
- Pay Your Bills On Time
One of the easiest ways to slide back into insolvency is through incurring late fees as a result of not paying bills on time. Organise a monthly calendar of what bills are due and when, so you can ensure that the money will be ready on time. If you can avoid the extra fees and interest that come from late payments, you’ll find it much easier to maintain your finances.
- Budget For Essentials
Draw up a monthly budget and figure out how much money you absolutely must spend every month. Be as strict as possible when determining what is essential. If what you are paying for an essential is too high, look for more affordable options.
- Use Left Over Money To Build Savings
The best way to recover from bankruptcy is to rebuild your savings account. After all of your essential monthly expenses have been paid, instead of spending the money on something that is not essential – put it into savings. If an emergency occurs and you have some savings, you can use that instead of having to overspend on credit cards. Having a savings asset can also help when you need to apply for more credit.