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Bankruptcy will destroy your credit rating and frankly there is nothing you can do about this.  What you can do, however, is work to rebuild it as soon as you can.  Here is some guidance as to how to go about this.

Check your credit files immediately after you go bankrupt and correct any errors

Looking at your devasted credit records may be the last thing you want to do as soon as you have been declared bankrupt, but it does matter because you need the default dates to be correct.  If they are out by a day or two, then you might just decide to ignore it, but if they are out by weeks (or even months), then you need to take action to make sure that your credit record is cleaned up as quickly as legitimately possible.  In most cases, you need to contact the reporting company rather than the credit bureau.  The sooner you get your credit file in order, the sooner you’ll be able to be accepted for a specialist credit card and the sooner you’ll be able to start proving to the world that you can handle credit responsibly.

Get a high-risk credit card and start rebuilding your credit rating

In principle, you can just leave your bankruptcy to dissolve away by itself over the course of 6 years, but in practice, there are a number of reasons why you might want to do everything you can to speed it along.  Even if you have no intention of taking out any credit for anything ever again, the fact remains that these days our credit records can play a very large role in our lives.  For example, they are likely to be checked by landlords and by some employers.  They can also play a role in more minor, but still meaningful areas such as your ability to be accepted for some contracts, such as mobile phone contracts.  Admittedly, you may have a greater range of options for working around these smaller restrictions, but even so, it’s generally a good idea to keep as many options open as possible.  Contracts can be restrictive, but there are times when they really are the best option.

NB:  Your credit rating will only improve if you use a credit card in an ultra-responsible manner, which means paying off the outstanding balance in full and on time each and every month.  If you are only using your credit card for essential purchases you can actually afford, then all this will take is some organisation.  If you cannot commit to doing this, then it is usually best to leave well alone as high-risk credit cards carry high rates of interest and paying this interest can hurt your budget without improving your credit rating.

Check your credit file again immediately after your discharge

As with the first point, this may be the last thing you want to do now that you’ve finally put your bankruptcy behind you, but it is still a very good idea to make sure that your credit records have caught up with the new reality and are accurately reflecting the fact that you are now discharged.  If not, then the approach is similar to the one outlined in the first paragraph.  Basically, you need to contact your former creditors and ask them to update the record appropriately.  If you have any issues getting companies to correct their entries, then your best approach might be to rattle the GDPR stick and threaten to complain to the ICO.  If that still doesn’t work then do so.  You may well have a legitimate claim and if not then they will simply tell you so.



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