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Clean up credit file after bankruptcy

August 9, 2020
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Cleaning up your credit file after Bankruptcy

Whilst going bankrupt can feel pretty final, it is, in fact, a new start and the beginning of your new financial life. The path to recovery can be a long one, but there are plenty of things that you can do to speed the process up. When you go bankrupt, the mark will be left there for at least 6 years from the point it started and whilst you won’t be able to fully get going until it’s expunged, operating your finances in the right way will stand you in good stead for the future.

It’s really important to ensure that your default dates are showing as no later than the date of your bankruptcy, as it can cause issues for your future credit applications. Should they be showing as incorrect, it’s imperative that you tell the creditor in question, as to tell anyone else would just be elongating the process

Verifying your information with all of the UK credit agencies is also vital, as they might not all have the same information and very often their details are different, due to the fact that not all creditors report to the same agencies. When you do contact creditors to make them aware of the discrepancy, make sure it’s in writing, as if you call them, you’re just going to be asked to write in.

Get yourself some new credit

Getting a credit card so soon after money issues might feel a bit….well…wrong, but it’s one of the most helpful things you can do to rebuild your credit status. We’re not suggesting that you go and get one and start spending again, rather we’re recommending that you go for a low limit credit card like the Vanquis Card that’s designed for this kind of scenario.

The best way to operate this card is to only use between 10-15% of the maximum limit each month and pay it promptly, without fail. This shows that you can be trusted to manage credit properly and the longer you do it for, the more your score will rise. You might take a bit of a hit to begin with, as applying for credit is going to hit your overall score, but managing it in this way after that will more than makeup for it.

Don’t however apply for several, thinking that this will increase your chances of success, as multiple applications can really knock you back and completely take away the purpose of what you’re trying to achieve.

Avoid high cost credit

Whilst obtaining low cost, low maintenance credit will help you build your credit score, taking out high cost credit, like payday loans and doorstep loans are not only hard to manage (due to the high level of interest), but they actually hurt your cause. High cost credit is deemed as an emergency option which actually knocks your score down, so you should stay away from it.

Live within your means

You should try to live within your means, even with this new line of credit at your disposal. If you start behaving in the same way that led to your problems in the first place, it won’t be long until you’re having money problems again. Try to stick to the principle of only buying what you’ve saved up for or what you can realistically afford. DON’T start relying on credit to get you through.

Also, always pay on time, every time, as even late payment can show up on your file, even if you are just a few days late.

Put these measures into place and you can put your bankruptcy well and truly into your rearview mirror and start increasing your credit status in a meaningful and long-lasting way.

How can I obtain my credit file?

There are four credit reference agencies (CRAs). Experian, Equifax, Transunion and Crediva. You can check all 4 using Check My File.

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