If you've declared bankruptcy or are a discharged bankrupt, there are some steps you can take to improve your credit history. Bankruptcy remains on your credit report for up to seven years, so you can set short and long-term goals to get your finances back in order. If you've been discharged from bankruptcy, whether you can apply for a credit card will depend on your credit score and other factors.
From growing your savings to improving your repayment behaviour, you can use this guide to discover how you can improve your credit during and after your bankruptcy.
How to repair your credit after bankruptcy
By following the positive financial steps below, you can start to improve your credit position after bankruptcy:
Work on your employment circumstances. The financial security that comes from having stable employment can improve your credit rating and shows lenders that you have a regular source of income. A permanent or ongoing job will also help your overall financial circumstances, so it is a great first step to take.
Grow your savings. Savings can demonstrate to lenders that you have the ability to financially manage your finances. Start by regularly putting money aside, even if it is just a small amount that you transfer to a dedicated savings account. You can also use finder's guide to budgeting to get started.
Consider getting a term deposit. If you have a lump sum of money you can put into a term deposit account, you may be able to use it to get a secure loan that will help re-establish your credit accounts. You can learn how they work and compare our options in finder's comprehensive guide to term deposits.
Limit your credit applications. Too many credit applications can negatively affect your credit history. Even if you've been discharged from bankruptcy, it’s important to be selective about the types of credit you apply for to increase your chances of approval. If possible, only apply for one product at a time and look for options that are likely to be approved, such as secured loans, options with a guarantor or joint accounts. You should also wait until you've built up your credit score before you apply for any lines of credit. Otherwise, any rejected applications could further hurt your credit score.
Make payments on time. Whether you have a secured loan or an electricity account in your name, paying the balance on time will help you build up good credit history after bankruptcy.
Talk to issuers. If you want to apply for a particular product after bankruptcy or learn what options are available, consider contacting banks and other lenders to discuss your situation. They will be able to advise you on your eligibility and answer any specific questions that you have to help you find options that will work for you.
The credit repair process takes time, but each positive behaviour will have a good impact on your credit file. You can check out finder's guide to credit repair for more tips.
Is it worth contacting a credit repair agency after bankruptcy?
If you've found any incorrect negative listings or black marks on your file, you can enlist the help of a professional credit repair agency to have those listings removed. However, these credit repair agencies may be able to do little for you after bankruptcy.
In fact, the government’s MoneySmart website warns people to be wary of these companies as they “may not always be able to do what they claim”. So if you are interested in getting a credit repair agency to help you improve your credit file, make sure you compare different options and research their services so that you know exactly what you are paying for.
What types of credit cards can I get after bankruptcy?
You'll need to have a good credit score to apply and be approved for a credit card in Australia. This means that you're unlikely to be eligible for a credit card shortly after being discharged from bankruptcy. If you've been following the steps above and improving your credit score, there are some credit cards that could suit you:
Credit cards with low minimum income requirements. These cards have low minimum annual income requirements of around $15,000 to $25,000 per year. They usually offer features such as low interest rates, competitive annual fees and sometimes 0% balance transfer offers. If used properly and paid in full each statement period, these cards could help you build up your credit history without high costs.
Low credit limit cards. These cards have low maximum credit limits, which can help you keep your spending under control. When you apply for a credit card, you should request a realistic credit limit and make sure you stick to a budget to avoid overspending. Again, paying off your balance in full each statement is ideal and will help you avoid interest costs.
Joint account credit cards. You can apply for some credit cards with another person, which means both your credit histories will be assessed for the application and you will share responsibility for the account. If the other applicant has a good credit history, it can increase your chances of the credit card being approved so that you can start building up a good credit score.
You should only apply for a card when you are confident you’ll meet the eligibility requirements and can manage the account responsibly. Bankruptcy can remain on your credit report for seven years, so you may want to contact the bank before you apply to discuss the likelihood of your approval.
Make sure to compare your options and consider contacting the card issuer before applying to discuss your likelihood of approval before applying.
Compare low credit limit credit cards
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If you've filed for bankruptcy, there are a few different strategies you can consider to get your finances back on track. Build up your savings and pay your accounts on time. If you've been discharged from bankruptcy, you should only apply for a credit card or other credit products once you've taken the time to improve your score.
Once you get out of bankruptcy, it’s important to learn how to manage your new spending habits and handle your finances carefully. In this guide to bankruptcy and credit score, you can find more tips to improving your finances after declaring personal bankruptcy.
Bankruptcy details are listed on your credit file for two years from the discharge or annulment date or five years from the beginning of the bankruptcy – whichever comes later. As a result it should have been removed from your credit file now.
Yes, but the details of your bankruptcy will still be on your credit file, which could affect your ability to get approved for a credit card or loan at this time. You may want to focus on improving your credit history to increase the chances of getting your application approved in the future.
Jeremy Cabral is the chief operating officer and global head of publishing for Finder. He has written hundreds of comparisons covering everything from credit cards to travel money to Netflix TV shows. Jeremy has a Bachelor of Business (Marketing) from the University of Western Sydney. See full bio
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The bankruptcy listing remains on your credit file for two years from the annulment date, or five years from the beginning of the bankruptcy – whichever comes later. As a result it should have been removed from your credit file now.
While there’s nothing stopping you from moving interstate, it is ideal that you file for bankruptcy and repay all your debts first in order to keep the debt collectors from hounding you and to protect your assets from repossession when you leave.
However, do take note that bankruptcy may have a long lasting effect on your credit file for at least 5 years or even longer. This may affect your credibility and reputation, employment opportunities, and chances of securing credit again.
To help you bounce back from bankruptcy, you might want to check our guide on credit repair after bankruptcy to know the steps you can take to put your credit score back on track.
hi i am discharged bankrupt for 6 months i voluntary went bankrupt how can i rebuild my credit rating i have a phone contract with opt-us i always pay on time i have a take home lay bye i always pay on time i have had a couple of small cash loans and all have been paid in full i have a income from my pension and i am working part time cheers
To start I was never given the option to attend court. They put me in bankruptcy. I now have the money to pay all fees charges they are asking for 100,000 dollars. They say they will give me an annulment on receiving this money. My question is does this bankruptcy say on my credit file? also why should it if I have paid this amount in full. Can I go to court and clear my credit file as there is no outstanding debt. Regards.
Information about bankruptcy will appear on your credit file for seven years.
If your creditor declared you bankrupt and initiated these bankruptcy proceedings in a Federal Court or the Federal circuit using a Creditor’s Petition, the creditor will give you a copy of the petition which mentions the time and date when you have to attend the court.
At the hearing, you may opt to:
a) agree to bankruptcy
b) disagree to bankruptcy and explain why, and
c) ask for an adjournment because you need additional time.
You may want to check this guide for further information regarding credit reports and credit files.
If you have a debt agreement, the length of time this information remains on file could vary depending on when the debt agreement was entered into and when it will end. This can also vary according to the organisation you are with. For example, Veda automatically deletes information from your credit report on or just before its expiry date, calculated using the retention periods set out in the Privacy Act.
I suggest that you contact your provider directly to confirm the information specific to your credit file.
For further information, you may wish to consult our credit repair guide.
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i went bankrupt 2008 will it be of my credit vile
Hi Susan, thanks for your inquiry!
The bankruptcy listing remains on your credit file for two years from the annulment date, or five years from the beginning of the bankruptcy – whichever comes later. As a result it should have been removed from your credit file now.
Cheers,
Jonathan
I’m wondering if I can move state in Australia. I’m in NSW and I’m looking to Move to VIC. Am I able to once I’ve declared bankruptcy?
Hi Kartz0000,
Thanks for your inquiry.
While there’s nothing stopping you from moving interstate, it is ideal that you file for bankruptcy and repay all your debts first in order to keep the debt collectors from hounding you and to protect your assets from repossession when you leave.
However, do take note that bankruptcy may have a long lasting effect on your credit file for at least 5 years or even longer. This may affect your credibility and reputation, employment opportunities, and chances of securing credit again.
To help you bounce back from bankruptcy, you might want to check our guide on credit repair after bankruptcy to know the steps you can take to put your credit score back on track.
For more information on bankruptcy, you may also check our comprehensive guide on bankruptcy and how to deal with credit card debt collectors.
I hope this has helped.
Cheers,
Sally
hi i am discharged bankrupt for 6 months i voluntary went bankrupt how can i rebuild my credit rating i have a phone contract with opt-us i always pay on time i have a take home lay bye i always pay on time i have had a couple of small cash loans and all have been paid in full i have a income from my pension and i am working part time cheers
Hi Ethan,
Thanks for your question.
Please refer to our guide on how to repair your credit rating after bankruptcy.
l hope this has been helpful.
Thanks,
Jonathan
To start I was never given the option to attend court. They put me in bankruptcy. I now have the money to pay all fees charges they are asking for 100,000 dollars. They say they will give me an annulment on receiving this money. My question is does this bankruptcy say on my credit file? also why should it if I have paid this amount in full. Can I go to court and clear my credit file as there is no outstanding debt. Regards.
Hi Nick,
Thanks for your inquiry.
Information about bankruptcy will appear on your credit file for seven years.
If your creditor declared you bankrupt and initiated these bankruptcy proceedings in a Federal Court or the Federal circuit using a Creditor’s Petition, the creditor will give you a copy of the petition which mentions the time and date when you have to attend the court.
At the hearing, you may opt to:
a) agree to bankruptcy
b) disagree to bankruptcy and explain why, and
c) ask for an adjournment because you need additional time.
You may want to check this guide for further information regarding credit reports and credit files.
I hope this has helped.
Cheers,
Sally
I entered a debt agreement in 2010. The last payment will be 14th September. How long will this show on my credit report after the final payment
Hi Rhonda,
Thanks for your question.
If you have a debt agreement, the length of time this information remains on file could vary depending on when the debt agreement was entered into and when it will end. This can also vary according to the organisation you are with. For example, Veda automatically deletes information from your credit report on or just before its expiry date, calculated using the retention periods set out in the Privacy Act.
I suggest that you contact your provider directly to confirm the information specific to your credit file.
For further information, you may wish to consult our credit repair guide.
I hope this has helped.
Thanks,
Sally