Improve Credit Rating after Bankruptcy

Improve Credit Rating after Bankruptcy Bankruptcy is recorded on your credit file for 6 years. However there are things you can do to improve your credit rating as soon as you are discharged.

  • When is Bankruptcy removed from your Credit File?
  • Review Default Notices and CCJs
  • Change the status of your Accounts
  • Start using credit to improve your Credit Rating

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When is Bankruptcy removed from your Credit File?

If you go Bankrupt a record is added to your credit file. It will remain there for six years from the date you went Bankrupt. There is nothing you can do to reduce this time period.

On the sixth year anniversary of the start date the record is removed. You do not have to contact the credit reference agencies to remind them. It happens automatically.

Your credit rating will continue to be negatively affected during the time the record stays on your file. Nevertheless there are certain things that you can do to start improving it as soon as you are discharged.

Review Default Notices and CCJs on your Credit File

After you go Bankrupt your creditors should no longer issue default notices or a CCJ (County Court Judgment) against you. However some of them may still manage to do so.

Default Notices or a CCJ are recorded on your credit file for 6 years from their start date. As such if they are issued after your bankruptcy they will continue to have a negative impact on your credit rating even after bankruptcy is removed.

You can identify this problem by reviewing your credit file. If it exists you can ask the lender to amend the date so that it matches the start date of your bankruptcy. You should write a letter to the lender’s Data Controller requesting the change.

If you would like a template letter which can be sent to Data Controllers please contact us. We will e-mail it to you. 

You should give the lender 28 days to comply. If they refuse you can escalate your complaint to the Information Commissioner. They have the power to force the lender to make the relevant changes.

Change the status of your Accounts

After you are discharged any lenders included in your Bankruptcy should update the status of your account. They should mark it as “partially satisfied” or “partially settled” to show you no longer owe them money.

You can identify whether this has happened from your credit file. If it has not you should send a letter to the creditor’s data controller requesting the change.

If the change has not been made after 28 days you can escalate to the Information Commissioner as described above.

Start using Credit to Improve your Credit Rating

After the record of Bankruptcy and any old defaulted records have dropped off your credit file potential lenders may still be reluctant to lend to you. This is because you have no history of borrowing on your file.

No credit history is just as bad as having a poor history. Lenders have no idea about whether you are going to be a good lending risk or not. You can only overcome this problem by building up a new history of responsible credit usage.

A good way to do this is to use a “credit repair credit card”. These are available to people with poor credit records or no credit histories. Using one for small purchases and paying the balance in full each month will start to build up a positive history of credit usage on your file.

The interest charged by credit repair card lenders is very high. To avoid paying this make sure that you pay off the balance in full at the end of each month. Such repayments provide clear evidence of responsible credit usage.

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