How an individual’s credit score is affected by Bankruptcy is just another factor that causes hesitation when considering personal bankruptcy. And yet you will recover it much faster than if you had opted for an IVA or Debt Management Plan, as these facilities drag on for years.
Indeed, those persons who opt for IVAs ahead of bankruptcy are often kept on for a 6th / 7th year and even then the ‘footprint’ of the IVA is visible for several years after.
We have had reports of people we’ve assisted with bankruptcy buying furniture on Hire Purchase just 18 months after discharge, while others have managed to get mortgages just three years after bankruptcy. In fact, we interviewed a local mortgage broker recently who confirmed that banks now offer a range of these mortgages, though admittedly the interest rate and deposit required is higher.
To aid recovery, it’s important to apply for one of the so-called ‘credit repair’ credit cards (Capital One, Vanquis, Aqua, etc.) as soon as you are discharged and make regular small purchases and payments in full. The reason for this is that successful payments record as a ‘O’ on your credit file i.e. a payment and a string of zeroes next to any financial transaction racks up the points on your credit score, especially if you settle in full every month (avoid minimum payments and cash withdrawals from ATMs).
Likewise, internet providers such as Virgin Media and BT also have contracts which record zeroes for successful payments. Follow these simple guidelines and you will be in good shape. Indeed, we’ve had past clients who report being offered ‘high street’ credit cards by their banks just two years after discharge.
‘How Is My Credit Score affected by Bankruptcy’ is just one of hundreds of questions we’ve answered over the years, but feel free to call us on 01425 600129 if you need to know more or need bankruptcy help. We are here to help.