Getting Credit After Bankruptcy
It can be challenging to rebuild your credit after bankruptcy. Even after you've been discharged from bankruptcy, it will remain on credit reference agencies' files for six years, meaning lenders are likely to view you as a potentially high-risk customer. This can put you in a disadvantageous position; access to affordable credit can be limited without a strong credit history and rebuilding your rating without access to credit can be challenging.
Rebuilding credit after bankruptcy
While repairing your credit rating after bankruptcy is difficult, it's not impossible. The most important thing is to follow all the terms of your bankruptcy order while it is in effect, and do everything you can to keep up repayments on any debts that aren't covered by it.
It is sensible to use a budget planner to keep track of your monthly income and outgoings, and if you think you might have trouble meeting a repayment, speak to your advisor as soon as possible to work out a solution.
If you are applying for credit cards or loans while you are bankrupt, you are legally bound to tell a lender that you’re bankrupt if applying for credit of more than £500, and for six months following your bankruptcy discharge. It's a good idea to check your credit reference file to ensure all the information listed is correct and use an eligibility checker, which will only leave a soft footprint on your credit file and which will not affect your credit score.
Once six months have passed since your bankruptcy has been discharged, and assuming you haven't had any problems making your repayments, it is probably sensible to start thinking about applying for credit again. As long as you do it responsibly and you know you can pay back what you borrow, this is one of the fastest ways to rebuild your credit rating, as it demonstrates that you can borrow and repay within limits.
However, it's prudent to borrow from a provider who specialises in helping people to rebuild credit. Not only are they less likely to reject you (which may affect your credit file), but they will be more likely to set limits and terms that you can stay within, helping you to rebuild your finances more quickly and safely.
It may take some time, but by using credit responsibly and paying all your bills promptly and in full, your credit rating will start to change to reflect your ability to deal with the consequences of bankruptcy.